Upward trend in Pre-owned Vehicle Price | AU Small Finance Bank
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Global pre-owned car price indicator at record highs due to semiconductor shortage

    The chip crisis has impacted new car production but is now responsible in boosting prices of pre-owned cars globally.
     
    While the semiconductor shortage has impacted the production of new cars across the world, it is come as a boon for the used car space. The Manheim Index, which gives an indication of wholesale used vehicle auction pricing, has moved up 52 percent higher year-on-year, indicating the upward trend in pre-owned vehicle prices globally.
     
    Wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 8.30 percent month-over-month in April. This brought the Manheim Used Vehicle Value Index to 194.0, over 52 percent increase from a year ago and a record high for the Index. The Manheim Index is increasingly recognized by both financial and economic analysts as the premier indicator of pricing trends in the used vehicle market, but should not be considered indicative or predictive of any individual remarketer's results.
     
    Poor supplies of semiconductors — a crucial component which silently powers modern infotainment systems, driver aids and multiple electrical components — have been adversely affecting companies for nearly a year now. Showing no signs of easing, the automotive and technology industries the world over are expected to continue being impacted well into 2022. As a result, a lot of vehicle users are shifting preferences and deciding to buy a pre-owned vehicle in the interim instead of the long wait for their new car.
     
    According to LMC Automotive, new vehicle production fell 4.6 percent globally. This is proving to be a booster for pre-owned car prices globally. Despite the growing competition, the pre-owned segment has grown 50 percent. Most industry players expect this trend to continue going forward.