According to Tero Kallio, CEO of the national Association of the Automobile Industry, Finland has begun to resemble Eastern European countries in that the auto trade is increasingly relying on used cars imported from abroad.
"Imports of used cars appear to be on the rise again, with July being a particularly busy month for used imports. Imports for the year as a whole are expected to reach around 45,000 vehicles," Kallio explains.
First registrations of new cars, on the other hand, are expected fall to their lowest level since the 1993 recession. According to the official forecast of the car industry, around 75,000 new passenger cars will be registered this year. In relation to imports of used cars, this figure is completely unsustainable, he says.
"As an economy we have slipped into the group of Eastern European countries, and this is reflected in the fact that we are receiving more and more used cars from abroad in proportion to the number of new cars sold. This is an undesirable development for the economy as a whole, and is indicative of the nation's dwindling purchasing power, as cars are increasingly being bought second-hand from abroad and less frequently new at home," he points out.
And, an upcoming increase in VAT will do nothing to alleviate the situation.
"Policymakers should take note. There are remedies, such as the quick fix of reinstating the bounty for scrapping old cars. That would stimulate the new car trade. In the longer term, a reduction in vehicle tax is needed," Tero Kallio argues.
While Kallio expects new car sales will pick up slightly next year, they will remain at historically low levels.
A vicious circle
According to Kallio, every year Finns spend around two billion euros on used cars brought in from abroad.
"We don't sell used cars to other countries, but we do pick them up elsewhere. In Sweden, for example, the balance is the other way round. Far more used cars are sourced for export from Sweden than are brought there," Kallio notes.
The slowdown in new car purchases has led to a strange spiral in the trade. As fewer new cars are sold in Finland every year, fewer of them will end up for resale at dealerships in a few years' time. Car dealers will then fill demand for used cars by importing more from abroad.
"This is a vicious circle that feeds on itself," Kallio explains.
What stands out from the statistics on used imports is the sharp rise in the share of plug-in hybrids this year.
During the period of January-July, they accounted for 47 percent of all used car imports, while the share of new plug-in hybrids has settled at 20 percent.
"The availability of used plug-in hybrids has improved significantly. Cars bought new one to three years ago have now entered the used car market," says Petri Poukkula, CEO of the car retail chain Saka.
According to Kallio, the popularity of used plug-in hybrids is due to their extended range on a single charge.
Poukkula says that the higher purchase price of fully electric cars and the limited availability of certain models have slowed down sales. Consumers are also concerned about charging infrastructure issues.
"Although the charging network has expanded and is growing, it is not yet as comprehensive as the traditional fuel distribution network in Finland," he points out.
However, Poukkula believes that the share of both plug-in hybrids and full EVs will continue to grow steadily in coming years.
"Even so, the share of internal combustion engine cars will remain mainstream for a long time to come. At the moment, there is no prospect of a significant change in the market trend," says Poukkula.
Most from Sweden and Germany
Volvo, BMW and Mercedes-Benz are the top brands for used imports of plug-in hybrids. Tesla is by far the leading brand for all-electric vehicles. Polestar and Volkswagen are popular, but well behind the leaders.
Sweden and Germany have long been the top source of imported used cars. Around 60 percent of imported vehicles will be sourced from Sweden this year, 25 percent in Germany and the remaining 15 percent from elsewhere.
According to Kallio, dealers handle about 75 percent of used car imports and buyers themselves pick up about a quarter directly from abroad.
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