New and used car prices falling thanks to Chinese brands

Context

TL;DR

• Average prices of new cars fell in the third quarter.
• Used cars also declined, with supply increasing.
• Chinese brands are increasing pressure on prices.
• Used electric cars are growing in the quarterly comparison.

Key facts

In the third quarter, in Switzerland, the average asking prices for new cars advertised on AutoScout24 fell by 2,6% compared with the previous quarter; year on year, the decline was 5,8%. The figure is reported in a market analysis published today by the portal, described as a leading player in the Confederation for vehicle sales. The news was reported by Keystone-ATS.

The decline also affected used cars: average prices were 0,8% lower than in the second quarter and 4,3% lower in the year-on-year comparison indicated by the analysis. The trend therefore concerns both main categories observed, with varying intensity.

Categories with the largest changes

Among new cars, petrol vehicles fell by 4,4% compared with the previous quarter and by 4,9% compared with the previous year. The most substantial reduction concerned new plug-in hybrids: their cost fell by 16% year on year.

The picture for used electric cars is different over the short term. Prices rose by 1,5% compared with the April-June period, but the year-on-year comparison remains negative, with a decline of 1,4%. The source thus points to a difference between quarterly and annual trends, with no uniform development across powertrains.

As for supply, vehicle listings on AutoScout24 increased by 0,7% compared with the previous quarter and by 2,6% over a year. For used cars, the increase was 0,9% compared with the previous quarter and 2,5% year on year; listings for new cars, on the other hand, recorded a change of -0,8% in the quarterly comparison and +3,9% in the annual comparison.

The decline in prices is part of a trend that has already been observed for some time. In spring, AutoScout24, a platform belonging to Swiss Marketplace Group, or SMG, had reported the growing presence of Chinese manufacturers in Switzerland. Their offering combines lower costs, technological advances and a strong pace of innovation. According to the source, competition from Chinese brands is among the factors that could contribute to the decline in prices.

Operational details

To interpret the Swiss market picture without confusing different signals, it is useful to separate three questions: how much the average price changes, over what period the change is measured, and how many vehicles are advertised. AutoScout24's analysis places these elements within the same framework, but does not use them to describe the same dimension of the market.

Price is not the only indicator

The quarterly and annual comparisons serve to show two distinct movements. The first highlights the most recent change, because it uses the previous three months as its reference; the second shows the trend compared with the annual period used by the analysis. For anyone examining a listing in Switzerland, this distinction prevents a short-term change from being treated as if it alone described the entire trend.

The number of listings also requires a separate reading. The total supply advertised on the platform has grown, while among new cars the quarterly figure fell and the annual figure rose. For used cars, on the other hand, both comparisons of listings indicate an increase. The resulting picture is complex: falling average prices and changing numbers of advertised vehicles are not the same data point.

Chinese competition adds another perspective. AutoScout24 had already reported the spread in Switzerland of more affordable manufacturers. The source, however, also links interest to technological progress and the speed of innovation. The phenomenon is therefore not presented solely as a price war: the offerings of Chinese brands are described in terms of cost, technology and innovation.

For a national reader, the practical point is to keep these three checks separate when consulting the platform's data. First, identify the vehicle category, then look at the comparison period, and finally consider the evolution of listings. Only in this way can the reduction in price quotations be read together with, but not confused with, the evolution of supply.

Key points

A simple procedure for reading a listing

Anyone considering a vehicle in Switzerland can use the update as a checklist, without turning the platform's average figure into an individual decision. The first step is to choose the scope: a new car or a used vehicle. The source in fact shows two markets with distinct changes, so mixing them in the same comparison makes the reading less clear.

The second step is to set the time horizon. One can start with the third quarter and then check the reference to the previous three months; separately, one observes the year-on-year comparison. The two columns should not be merged: one describes the more immediate movement, while the other shows the change over a broader period indicated by the analysis.

Five-step check

1. Select the vehicle category and keep new and used vehicles separate. 2. Note the type of powertrain, distinguishing petrol, plug-in hybrid and used electric vehicles. 3. Read the quarterly and annual figures as different comparisons. 4. Check the number of listings relating to the selected category. 5. Consider competition from Chinese brands alongside costs, technology and innovation.

The third step is particularly useful for powertrains that show misaligned signals. The source in fact describes a quarterly trend different from the annual one for used electric vehicles. Applying the same check to the other categories helps avoid focusing only on the most recent figure.

The fourth step serves to place the listing within the offering observed on AutoScout24. The total number of vehicles and the number of new or used listings do not necessarily move in the same way; for this reason, it is advisable to look at the entry corresponding to the vehicle being examined, rather than replacing it with the total.

Finally, Chinese competition should be recorded as one element of the overall picture, not as the sole explanation. According to the source, more affordable prices are accompanied by technological progress and a sustained pace of innovation. The platform, belonging to Swiss Marketplace Group, is the starting point indicated by the analysis for tracking prices and listings.

To place this monitoring alongside the other items in the household budget, consult the costo della vita in Svizzera.

Source: swissinfo.ch