Whilst the Volkswagen emissions scandal may have wiped an almighty 20% off the company’s share value, it seems, at least for the time being, that its used car values have only been ‘marginally affected’ with a 3% fall in value for the brand’s diesel cars, according to latest figures from Glass’s.
Publishers of one of the industry’s key valuation guides, Glass’s latest figures show the slight drop in value of VW vehicles, but just over a week since the scandal broke, the wider impact could yet to be felt.
Based on more than 78,000 observations, Glass’s analysis reveals that trade values of all used VW cars are the same as they were at the beginning of September. However, with the overall used car market enjoying a boost of 2.1%, the valuation gurus report this effectively means VW values have fallen by 2.1%.
Looking at VW diesel vehicles in isolation, Glass’s reported a 0.2% drop in values, again since the start of September. Again, though, the overall market has risen by 2.8% thereby indicating a fall of 3%.
The analysis from Glass’s also looked at the values of Golf diesels likely to be fitted with the Euro 5 engines affected by the scandal and tellingly these fell by 3.7% in September compared to the model’s direct competitors which also fell in value but 0.5% less than the Golf at 3.2% lower.
Glass’s themselves report anecdotal evidence that the trade is adopting a cautious approach to VW models whilst some of our own Carvue clients, especially those specialising in diesel, also report trade is unnaturally quiet. Meanwhile, the headlines foretelling the end of diesel powered vehicles has meant consumers are questioning whether such a vehicle is a good buy because they fear both future resale values and potential government penalties.
The latest figures from Glass’s though will be music to the ears of many used car operators who have long filled their forecourts with diesel vehicles, particularly those who rely on ex-fleet vehicles for stock. The good news is that the diesel market overall has risen, with September being the plate change month when typically more defleeted and part-exchange vehicles come onto the market, the rise could well be seasonal, but traders will take some cheer that diesels remain in demand.
Of course, it is early days and dealers and analysts will be watching the market carefully over the coming weeks. Glass’s also pointed out values will be further influenced depending on how much the UK has been affected, which has yet to be revealed, and subsequently, how the manufacturer manages the situation which will then determine consumer perception of the brand.
Rupert Pontin, Glass’s head of valuations, said: “We are still waiting to find out the full extent of the issue in the UK. Dealers and customers are not in a position to make a clear judgement about how they feel about Volkswagen as a company and whether they will be prepared to continue to buy their cars going forward.
“In our opinion, we may yet see further value changes as VW release more information. The way in which they do this, and the manner in which they support their dealer network and customers, will heavily impact on overall perception of the brand.
“We are aware that a number of key trade buyers are viewing Volkswagen conservatively for the time being, although it is fair to say that there are also others who are less concerned and are essentially standing by the brand and its products.”
He added: “Our market sources would lead us to believe that there has been a minimal change in asking prices although there are various anecdotal reports of reduced retail interest, lower used sale activity and a reluctance for the trade to take part-exchanges.”