As the ongoing semiconductor shortage and the lingering effects of the coronavirus pandemic continue to stifle new car output, demand for used cars has soared.
New figures from the SMMT reveal that April-June 2021 was the "best ever second quarter" for the used car market, with 2,167,504 models changing hands. That's up 108.6% on the pandemic-stricken Q2 2020 tally, but more relevantly represents a 6.6% increase over Q2 2019, before the pandemic hit.
During the three months, just 1095 fewer used cars were sold than in Q3 2020, which remains the best period for the UK used car market on record.
Year-to-date the market has grown 33.3% compared to the first half of 2020, but remains 4.9% down (roughly 200,000 units) on the same period in 2019.
The SMMT attributes the significant quarterly uptick primarily to the reopening of businesses, an increased demand for personal mobility and new car stock shortages in the wake of the coronavirus pandemic.
Chiefly, the shortage of semiconductor processing chips - which are fundamental components in the electrical systems of all new cars – has heavily restricted the ability of manufacturers to ramp production back up to pre-pandemic levels.
In many cases, new car buyers are facing heavily extended lead times compared to normal, and some cars are even now being sold without certain features that depend on the devices, commonly referred to as chips.
Mike Hawes, the SMMT's chief executive, welcomed the latest figures as a sign of recovery in the used car market, which in turn will benefit the new car sector: "More motorists are turning to used cars as supply shortages continue to affect the new car market, and the increased need for personal mobility with people remaining wary of public transport as they return to work.
"A buoyant used car market is necessary to maintain strong residual values which, in turn, supports new car transactions. We now need to see a similar rebound in new car sales to accelerate the fleet renewal necessary to deliver immediate and continuous improvements in air quality and carbon emissions.”
The increasing variety of zero-emission-capable cars over the past few years has translated into an increase in demand for second-hand plug-in hybrids (PHEVs) and battery-electric vehicles (BEVs).
However, the SMMT notes that PHEVs accounted for just 1.3% of all used car transactions, compared to 96.4% for petrol and diesel vehicles, showing that "he scale of the challenge to transition the entire used car parc away from traditional fuels remains significant".