Imports of used cars grown 15% so far this year

Cars selling well despite rising fuel prices

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The import of used cars to Finland shot upwards in the early part of this year. The years of decreasing imports turned around when the car tax went down, and changes were implemented so that it is now based on the amount of carbon dioxide the model puts out; the higher the car’s emissions are, the higher the tax.
      In 2003 32,000 used cars were imported into Finland, but last year the number had decreased to about 22,000. In January-April this year imports rose by more than 15%. Customs authorities rendered taxation decisions on 7,996 used imports, up from 6,939 at the same time last year.
     
When the car tax went down at the beginning of the year, and the prices of cars with moderate to low fuel consumption declined as a result, it was generally assumed that imports of used cars would decline. The opposite has happened.
      In addition to imports of used cars, car sales have increased in general, in spite of high fuel prices. Sales of new cars increased in January-April by more than 17%. However, some of the increase is attributed to the fact that deliveries of the vehicles in deals made late last year were often delayed until the beginning of this year.
      Pekka Puputti, managing director of the Association of Automobile Importers in Finland, says that the car dealerships now have considerably more orders than last year.
      Finland seems to be bucking the European trend. In the EU as a whole, sales of new cars declined in January-March by three per cent, and in the United States, the decline was as high as 14% in April.
      In Finland, the forecast for new car sales this year is 151,000, which would be more than at any time in the past 20 years.
     
Expensive petrol has not slowed down sales of used cars either. At car dealerships, and at used car businesses under their ownership, almost as many used cars were sold in January through April as at the same time last year, says Markus Halonen, chief analyst at Grey-Hen Oy, which monitors marketing activities.
      “On the other hand, the number of cars in stock was 15% lower in April than it was a year ago. In May there was an increase in unsold stock again.”
      Although sales have been brisk, the statistics of the Finnish Vehicle Administration (AKE) reveal that the number of registered cars on Finnish roads declined by nearly 5,000 in the first three months of the year.
     
With new cars it is clear that carbon dioxide emissions have declined. Whereas last year the average emission level was slightly under 180 grammes per kilometre, now in January-April the average level was 161.5 grammes per kilometre.
      "The results are somewhat more positive than we dared imagine", says Marko Koski of Finnish Customs.
      The problem with the import of used cars is their age, as older models tend to have higher emissions than newer ones.
      The median age of the imported used cars was eight years in 2007, and the same this year.
     
There is no precise information on emissions of used cars. Finnish Customs is drawing up a report on how much of an effect the taxation changes have had.
      "Sales of new cars grew by 17% and imports of used cars grew by 15% in January-April this year. In spite of that, the yield of the car tax has declined from last year’s level by about 10%”, Koski says.
      When it changed the rules on car taxation, the government calculated that in the long term, the yield of the tax would decline by 18 per cent, or EUR 216 million.


Previously in HS International Edition:
  Changes in vehicle taxation boost growth of cars with small engines and low emissions (17.3.2008)
  Changes in car tax bring down resale prices of used cars (7.2.2008)
  Emission-based car tax to bring down price of new vehicles next year (2.11.2007)

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