Used car prices up 7.5% in June quarter, but relief in sight

Inflation is in the spotlight across Australia, with June quarter CPI figures due out on Wednesday and expected to show an acceleration to an annual single digit close to 6.3%, the highest in 32 years .

Moody’s Analytics predicts that the rising cost of living, rising mortgage rates and rising energy bills will help temper demand for used vehicles in the September quarter. Moody’s Analytics expects used vehicle prices to fall in this quarter as well because imports of new vehicles increase and supply begins to meet demand. But they suggest that if consumer demand declines faster due to rising interest rates and cost of living pressures, prices could fall faster.

“The used vehicle market will correct itself next year, the report concludes.

Moody’s Analytics predicts that after an expected gain of 16% in 2022, prices are expected to fall 11% in 2023.

Global shipping container freight rates and easing supply chain disruptions mean improvements are underway in the availability of new vehicles in Australia. A Moody’s Analytics Supply Chain Stress Index for the United States and China shows supply chain pressures easing, though not back to pre-pandemic levels . It also warns that the availability of semiconductors for new vehicles remains “tight” and is a constraint on the production of new vehicles by global automakers.

Used car prices in June fell 3.7% from May. But that still meant prices were up 15.7% year-on-year.

Meanwhile, Rich Lister Nick Politis continued his steady purchase of shares in Eagers Automotive, Australia’s largest car dealership group. Mr Politis is already the largest shareholder in the company and has bought a batch of 10,000 shares on each of the last 10 trading days on the ASX. The latest notice on the ASX on Tuesday showed it acquired 10,000 shares at $12.34 on Monday.

Mr Politis, who was ranked No. 51 on the Australian Financial Journal’s rich list in 2022 with an estimated wealth of $2.23 billion, has extensive private interests in the automotive industry, as well as being the main shareholder of Eagers Automotive, which manages 200 vehicles. showrooms and has a national market share of approximately 10 percent.

Eagers Automotive bought Mr Politis’ car dealerships in Canberra for $193 million in mid-July.

Mr Politis, who is chairman of the Sydney Roosters in the National Rugby League competition, now owns a total of 70.3 million shares in Eagers Automotive, a 27.3% stake.

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