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This is how the Corona ran the Israelis into the used car market
While the new car market can at most take comfort in a moderate decline in sales in 2020, when it comes to the used car market this has been a year that has beaten forecasts.
How did this happen and what were the Israelis looking for?
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Corona
Used car
Used cars
Used vehicle
Keenan Cohen
Sunday, 07 February 2021, 13:12
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Shlomo has a comfortable car sale to believe that this year has changed the model of buying a used car in Israel (Photo: PR, Oren Alfasi Aerial Photography)
When the corona burst into our lives somewhere about a year ago, under a cloud of uncertainty that surrounded the various trading industries - the forecast that prevailed in the car market indicated a very high chance of the industry crashing.
The line drawn between points such as a crisis in the employment market, the shrinking of trade and services industries, a complete halt to domestic and inbound tourism, beyond working from home - all of these connected to a very clear picture.
But like the virus itself, the results in the real world were very deceptive.
With about 222,000 new vehicles, the new car market ended 2020 with a 15 percent decline over 2019 - a significant achievement in this difficult year.
But impressive as it may be, the used car market encompasses much higher numbers - about 650,000 ownership transfers were recorded in the used car market in 2020.
This is a decrease of only 1.6 percent compared to 2019 - a small decrease equivalent to about 10,400 vehicles.
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When this figure is broken down into a segmentation between sales transactions between private individuals and those of traded and used companies, another interesting angle is revealed, while the volume of activity between private individuals decreased by 7 percent - leasing and rental companies saw a 3.7 percent increase between 2019 and 2020.
Part of it can be explained by the rental companies' appeal for an extensive sale of inventory that in the absence of domestic or foreign tourism stood and "burned" value and money, but there were other reasons.
In the analysis of Tal Bar-Lev, CEO of Shlomo Vehicle Sales, which recorded a 16.4 percent increase this year compared to last year, the general increase in their used and spot industry had several main reasons. Some could also be identified in analyzes of the new car market, and some unique to the used division. .
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This was not a year to rely on public transportation (Photo: Reuven Castro)
"People were looking for a moment-by-moment solution," says Bar-Lev. "There is no one who is willing to be stuck at home during the Corona period without a car in the parking lot. We recognize this because of quick purchases made with us. unpaid leave without a car and realized that they have wheels. "same speed shopping he speaks to them also characterize different customers than previously acknowledged.
" we have not seen the negotiation processes that we used to see, where customers' driving us heavy "before the transaction.
People who get a quote, go to a competing company, come back with a better quote from them and compare what you asked for and what they gave him there. "This quick process is also related to changes made in the transaction process structure that include much more phone closing activity, one that allows the customer to decide Last and foremost in the sale itself. And not only these, Bar-Lev also refers to the fact that their flexibility and speed of response to the situation was a key to dealing with it. This means that in addition to the quick sales processes there was a quick move of transparent station stand equipment. Establishment of open sales stands outside the branches and more.
Mazda 2, starred in the used car market (Photo: Nir Ben-Tovim, Nir Ben-Tovim)
So what, after all, drove people to the lots of used and traded companies?
"We did not do surveys, but when we asked our sales people to ask about the reasons that led customers to buy the cars, we discovered all sorts of reasons," says Bar Tal.
"One of the reasons people changed cars was to 'encourage' the family. Everyone is stuck at home, some are unsure about their continued employment, they have money available because vacations and recreation do not go out and it can be tens of thousands of shekels per family - so let's go and buy the sportage we wanted ".
There were also those who tried to find economic justification for this move "Families whose mortgage was frozen for six months without penalties, but whose income was not harmed, suddenly found themselves able to set aside thousands of shekels a month for six months."
But there were also customers with other considerations.
Those who precisely because of the economic uncertainty, changed their preference, who thought of buying a new car went in the direction of used both because of the initial savings, also because of the fact that it allows them more limited financial obligations and no less - the visibility of not putting a shiny new car "from the nylons" in the parking lot .
Evidence of the transfer of liquid sums of money to this channel could be seen in the volume of financing transactions in the industry - from a rate of 50 percent of the total transactions in the first quarter to orders of magnitude of 20 percent and less later.
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Hyundai Ionic, sought after as used and thanks to the wide range of attractive prices (Photo: Nir Ben Tovim, Keinan Cohen)
The big "boom" was with the end of the first closure in April and May, after which the increase was more moderate, but definitely in a uniform trend and in fact the months of June-August they ended with all-time sales records "say Shlomo, but was that one point In a row or will this year leave something even after the corona disappears?
They, naturally and clearly, want to see the glass half full: "This corona year will make more people continue to prefer trade-in deals with companies than sales between private individuals," says Bar-Tal.
Despite the economic viability that is not always there - it is important to note.
This is a trend that they think will also shape the coming years when it comes to buying used cars.
That is, beyond the American model of getting to the plots of the big companies and making a deal in one place, instead of transactions with private sellers.
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High demand also for Skoda Kodiak (Photo: Nir Ben Tovim, Rami Gilboa)
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Who did the Israelis buy in 2020?
As we have seen in previous years, there are significant similarities between the demand for a model as new and what accompanies them as used.
- Mini cars: Kia Picanto, Hyundai i10 and Chevrolet Spark
- Family: Skoda Octavia, Mazda 3 and Toyota Corolla
- Hybrids: Hyundai Ionic, Kia Niro
- Jeeps: Kia Sportage, Hyundai Tucson and Mitsubishi Outlander
According to Shlomo car sales data, these The sought-after models that achieved the closest price to the list price:
- Mazda 2
- Mazda CX5
- Skoda Kodiak
- Seat Ibiza
- Skoda Fabia
on the other hand, despite the popularity of some models, were also the ones that were difficult to sell at the list price:
Hyundai Ionic alongside the high demand for the market model Which was flooded with outgoing leasing cars dragged the price down.
Mitsubishi Atrez found itself in the same situation for the exact same reason as well as a number of models made by Renault, Citroen and Peugeot (although regarding the Peugeot 3008 this is one of the models that are in very keen demand in the private second hand market).
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