Auction houses report greater demand for petrol cars

Diesel has been under pressure for some time with negative media headlines on health, the environment and emissions testing damaging its reputation.

This damage has already been seen in diesel new car sales which are down 11.5% so far in 2017. We know that searches on online classifieds for diesel used cars are falling as potential buyers turn to petrol and – from a very low base – AFVs as alternative fuel sources.

But what impact are we seeing at at physical auctions –both large and small –and online? What’s actually happening at the sharp end?

Alex Wright, managing director of Shoreham Vehicle Auctions, thinks there is a bit of a north/ south divide in the demand mix.

“Based on the south coast we have many London-based buyers that use our auction. In the medium sized family hatchback sector they have certainly been buying more petrols than diesels as the move by the London mayor to penalise diesels gets ever closer. However, west country buyers that attend our sales continue to buy diesels reinforcing the petrol trend is very London centric.”

Justin Lane, managing director at Independent Motor Auctions, has a similar story, seeing a shift in the market with some dealers traditionally strong in diesel motors, turning to retail more petrol cars.

“Diesel values have remained steady and in line with current market prices and desireable diesels with correct history grade one or two remaining strong. We have seen a trend of traditional diesel buyers also acquiring the petrol equivalent models to showcase them both on their forecourt,” he said.

BCA is a huge player in the UK and should be able to give a UK-wide perspective. Its UK remarketing managing director Stuart Pearson said: “BCA data shows that average values for petrol and diesel have moved in tandem with the wider market this year, with no easing of demand for diesel cars in the wholesale sector. We will continue to assess the market and advise our customers accordingly.”

Most auction houses would agree that there is going to be some time lag before the wholesale sector is impacted.

Martin Potter, group operations director, Aston Barclay said that currently he has not seen any impact on either demand or prices.

“Talking to the manufacturers and dealers they are starting to see the demand for new diesels fall and demand for petrols increase but we believe it will

be some time before we see any change in the used market. A 60-70k mile diesel car coming into the market still has lots of life left in it so the demand from consumers is still high as it gives them a reliable car that is cost effective to run,” he said.

To gain an exclusively online perspective, we turn to Autorola. which has seen a fall in prices but not just for diesel, petrol, too.

Its UK group sales director John Mitchell, said: “In Q2 both petrol and diesel used prices fell on our online portal by £279 and £636 to £8,125 and £10,768 respectively. There are currently no signs that prices have fallen dramatically. It will be interesting to see how Q3 prices fare as we will have two quarters of prices to analyse to see if this is becoming a trend. However, our trade buyers continue to buy more diesels than petrols currently.”

And finally to Glenn Sturley, chair at the VRA, who represents firms that remarket 1.5 million cars a year.

“There has been very little change in demand for diesel product. Certainly late plate cars that are Euro 5 and Euro 6 compliant have not seen any adverse affect. All vehicles depreciate as they age and there has been minimal variation in the values of diesel product thus far.” He agrees that negative headlines have caused reputational damage but also points out that the new real life emissons testing may highlight the shortcomings of small petrol engine cars.

“There is an enormous amount of speculation and misinformation in the national press surrounding diesel. It is vital that an accurate and consistent message is given in a responsible way to the consumer to allow them to be able to make a fully informed decision on how they view diesel.

“Equally, the introduction of The Worldwide harmonised Light vehicles Test Procedure (WLTP) is likely to highlight the shortcomings of smaller petrol engines which may help the consumer appreciate that diesel is still a viable and valuable fuel choice.”