The combined challenges of the COVID-19 coronavirus pandemic and Brexit are making long-term planning almost impossible in the remarketing sector.
That’s the view of the Vehicle Remarketing Association (VRA), which represents the used car auction providers from across the UK.
While car auctions are currently reporting record levels of sales, the VRA warns there are potential dangers ahead.
Sam Watkins, VRA chair, said: “There is a fear that there must come a point when the coronavirus crisis will really start to have a negative influence in terms of the impact of factors such as growing unemployment and the end of furloughing.
“Even if there is a soft economic landing from the pandemic, something that we are hoping the latest post-furloughing government measures announced by the chancellor will help provide, there are massive fears about the results of Brexit, largely because we still don’t know what effect it will have on the motor industry as a whole. There are just so many unanswered questions.”
According to Watkins, people working within the sector are almost obsessively asking when the boom period will come to an end.
“For an industry that is historically very good at predicting and forecasting, this high degree of uncertainty is unnerving. It is almost impossible to plan beyond the short term. While we are all firefighting to handle current levels of business, there is also a definite fear that the situation could change very quickly,” she added.
The remarketing sector faces a period of unrest as daily rental companies will begin de-fleeting vehicles on a large scale that were being held due to constraints in new car supply.
There could also be a wave of vehicles from the leasing sector, caused by early terminations and short-term contract extensions.
Watkins added: “Because values have been so strong, it is possible that this potentially sizeable wave of vehicles might simply be absorbed by the market, but they could also act as a prompt for an overall realignment of values.”