Fuel spike briefly shifts used-car demand to plug-in vehicles

Rising fuel prices drove Finnish consumers towards plug-in vehicles in the used-car market, but demand for combustion-engine cars recovered during the summer, Yle reported. Sales of plug-in used cars rose by about 5 per cent year on year in the first part of the year.

Used-car sales through dealerships fell by 1.3 per cent from January to July compared with the same period last year, according to statistics from the Finnish Central Organisation for Motor Trades and Repairs. Overall, car sales improved slightly from the previous year.

The increase in plug-in vehicle sales was the clearest change in the used-car market. Tero Lausala, chief executive of the organisation, said the growing supply of fully electric cars was one reason for their increased popularity.

The shift in demand was also seen early in the year at Kamux, a used-car chain based in Hämeenlinna. The company said demand for plug-in vehicles increased as fuel prices rose, while demand for combustion-engine cars declined.

Inventories of combustion-engine cars began to grow and their prices fell, reducing Kamux’s profit margin. However, the effect of high fuel prices on demand appeared to be short-lived. Demand for combustion-engine cars had recovered at Kamux dealerships by July, reaching the level seen before the situation in the Middle East escalated in the spring.

Kamux chief executive Juha Kalliokoski said consumers were making major decisions based on changes in electricity and fuel prices. He said lower prices had brought demand back and created a price level at which combustion-engine cars were selling again.

Finns drive relatively old cars. At the end of last year, the average age of cars in use was 13.9 years. About three times as many used cars were sold during the first part of the year as new cars were registered.

Plug-in vehicles accounted for nearly one-fifth of used-car sales during the period, while they represented 60 per cent of new-car registrations. Their share of the entire Finnish car fleet was about 13 per cent, however, compared with the much larger share of combustion-engine cars.

Used-car sales are divided fairly evenly between private transactions and sales by dealerships. Private sales increased significantly last year but have since stabilised, while dealerships now account for slightly more than half of the market.

According to the Finnish Central Organisation for Motor Trades and Repairs, combustion-engine cars will remain available for a long time. If plug-in vehicles continue to sell at their current rate, an estimated 40 per cent of Finland’s car fleet will still consist of combustion-engine cars in 2040.

Lausala said dealerships could import combustion-engine cars or buy them from other dealers if demand remained strong. He added that a well-maintained petrol or diesel car would still find a buyer.