Finnish automobile market faces decline in new car sales as used imports soar

The Finnish automobile market is currently experiencing two contrasting realities. While sales of new cars are plummeting to unprecedented lows, the import of used cars from abroad is expected to reach near-record levels this year. Predictions suggest that approximately 45,000 used cars will be imported, with July being particularly busy for imports.

According to Tero Kallio, CEO of the automotive industry association, the registration of new vehicles is forecasted to drop to its lowest level since 1993, with about 75,000 new cars expected to be registered this year. Kallio highlighted the unsustainable imbalance where imported used cars are increasingly replacing new car sales. This trend indicates a gradual decline in the purchasing power of Finns, with more customers opting for used imports as new car purchases dwindle.

The situation is poised to worsen with an upcoming increase in value-added tax, prompting Kallio to urge policymakers to take action, such as reinstating the scrappage bonus to incentivize new car sales. Although he anticipates a slight increase in new car sales next year, it will still remain historically low.

Interestingly, the influx of used cars is also characterized by a significant rise in plug-in hybrids, which made up 47% of all used imports in early 2023. The availability of these vehicles has improved as used hybrids from one to three years old enter the market. Kallio attributes their popularity to extended driving ranges that allow users to significantly cut fuel costs.

However, the import of used electric vehicles has grown at a slower pace, due in part to their higher purchase prices and limited availability. As car dealerships predominantly handle about 75% of used car imports, a trend toward sourcing directly from abroad is less common among consumers.