With the increased prices of new cars and the slowdown of sales that started a few months ago, a number of experts predicted that the second-hand car market is going to be the only solution for those who wish to buy a car.
However, the second-hand car market strongly suffered and continues to suffer from the recession, especially considering the direction car dealers have taken with reducing the prices of new cars.
In a tour of the second-hand car market, it was clear that the market is seeing a price increase of 50% because of the rise of new car prices with rates that some described in the past few months as “crazy.” This led to a decline in the demand on new cars, and owners of used cars delayed their decision to sell them.
El Nasr Automotive Manufacturing Company’s cars, popular in the 1970s and 1980s, returned to top sales during 2017, as they seem to be the perfect solution for those who want to buy a car.
A manager of a second-hand-cars shop in Nasr City, Amr El-Sawy, said that the dollar crisis has heavily impacted market sales. The scarcity of supply of new cars has pushed car owners to delay selling them, causing a decline of 80% in the second-hand-market sales compared to the same period last year.
The prices of second-hand cars have increased by 50% under pressure from the suspension of new car sales. El-Sawy said the price of new cars is the factor that controls the second-hand car market. Cars in the price range between EGP 10,000 and EGP 25,000 are in the highest demand, while the prices of the cars on offer often exceed EGP 120,000.
El-Sawy said that Korean second-hand cars are in higher demand, especially the Hyundai Elantra and Kia Cerato, while sales of the Verna, Accent, Rio, and Lanos have stopped due to their high prices.
He revealed that cars in the price range between EGP 10,000 and EGP 25,000 topped the sales of second-hand cars with a 45% share of the market; those cars include the Fiat 127, 128, 131, and 132 models, as well as Shahin cars.
Prices between EGP 25,000 and EGP 60,000 come in second place, dominating 35% of the market, including the 1990s-model of the Hyundai Excel and Accent; the 1990s-model of the Opel Astra, Corsa, and Vectra; the Daewoo Nubira; and the 2008 Elantra HD.
Prices between EGP 60,000 and EGP 120,000 come in third place by controlling 15% of the market, including the post-2008 model of the Daewoo Lanos, the 2010 Aveo and its newer models, and the 2010 Optra.
Cars in the price range between EGP 120,000 and EGP 200,000 come in last.
El-Sawy explained that the sales of Chinese cars are not particularly high on any particular model, since price controls sales, not the condition of the car or its brand.
Some second-hand cars are experiencing a 50% increase in their prices, most prominently are the Škoda Octavia, Daewoo Lanos, and Hyundai Verna.
The manager of Mido Car shop for second-hand cars, Mina Nabil, said that since the beginning of last month, the second-hand market saw a 50% rise in prices compared to last year’s prices.
He explained that the market is seeing a recession in sales. Sales went down nearly 80% compared to the past three years. A large number of traders withdrew from the second-hand cars market as a result of the recession hitting the market.
He added that the so-called “People’s Cars,” manufactured in El Nasr Automotive Manufacturing Company during the 1970s and 1980s are experiencing a significant surge in second-hand sales.
He revealed that cars in the price range between EGP 50,000 and EGP 90,000 are in the highest demand. This category is mainly represented by Korean and Japanese brands.
Many buyers have moved to websites to buy their cars, which has negatively impacted the business of the second-hand cars market, he added.
In a tour of the second-hand cars market in Nasr City, it was clear that the market has been affected by the increased prices of new cars.
A manager of a second-hand-cars shop said the market has seen a 50% rise in prices compared to last year.
He explained that the market is experiencing a recession in sales by 80% compared to sales of the past three years, pointing out that a large number of traders withdrew from the market.
He added that cars in the price range of EGP 60,000 to EGP 90,000 are in the highest demand. This category is again dominated by Korean and Japanese brands.
The manager expected an increase in sales of second-hand cars in the run up to Ramadan, as the holy month is a season for the second-hand cars market and usually sees an increase in the number of buyers.
Another manager said that the dollar crisis significantly affected the market’s sales. The scarcity of new cars has pushed car owners to delay selling them.
He explained that the price of new cars is the factor that controls the second-hand cars market. Cars in the price range of EGP 60,000 to EGP 80,000 are in the highest demand at his store, while the price of cars on offer often exceeds EGP 90,000.
He said that Korean second-hand cars are in higher demand, especially the Hyundai Elantra and Kia Cerato, while sales of the Hyundai Verna, Hyundai Accent, and Kia Rio have stopped as a result of their high prices.
Korean cars topped sales in the second-hand market with 50% of the market’s sales, followed by Japanese cars with 30% of sales.
Chinese cars came in third place in the second-hand market, with 12% of total sales, followed by European brands with 9.5% and American brands with 8.5%.
Some second-hand cars are experiencing a 50% increase in prices, most prominently the Škoda Octavia.
Car trader El-Sayyed Ahmed said the rise in the US dollar exchange rate significantly impacted the sales of second-hand and new cars. Sales decreased by 50% to the lowest level of the past four years.
He demanded that the government conduct quick economic reforms to restore prosperity in the automotive market.
Car trader Ahmed Hussein revealed that the bestselling brands are Hyundai, Kia, and Toyota. Korean brands are the most demanded by clients, while other brands are witnessing a sort of recession.
Owner of Al-Eslameyya for Auto Trade, Mahmoud Abdel-Fattah, demanded that the Central Bank of Egypt (CBE) provides facilities and makes it easier for traders to open letters of credit. This will help them open new markets and face the recession that overtook the automotive market.
He added that the second-hand cars market is suffering a shortage in supply under pressure from the US dollar crisis, which increased prices by 50%.