The cost of living has risen and the impact is not limited to food or housing. Today, buying a new car in the utility segment (segment B) means spending on average 22.6% more compared to 2019 national market prices. This is the conclusion of an analysis by Dinheiro Vivo, which assessed the development of values in five of the best-selling models in Portugal over the past four years, taking into account sales to private individuals. Supply chain disruptions, transportation and parts shortages are just some of the factors that help explain the increases.
But let’s move on to practical cases. The entry-level version for a petrol Renault Clio cost €17,790 in 2019, while today it has a base price of €20,415. It is an increase of 2625 euros, 14.7% more, in what was the fifth best-selling car in the country in 2022. However, the cost variation is even greater if we look at the data related to the Dacia Sandero (+37.5%) or the Volkswagen Polo (+33.8%), whose prices increased by 3178 euros and 5632 euros respectively.
In a recent interview with Dinheiro Vivo about the semiconductor crisis, Hugo Barbosa, communications director at Renault Portugal, attributes the start of the unrest in the car industry to the pandemic. With the impact of covid-19, builders adopted “defensive behavior” in reducing orders for chips, mostly manufactured in Asia, and demand for these components was absorbed by the IT equipment sector. “There was no longer enough production for everyone,” he explains. However, the increase in new car prices, he says, is also due to rising production costs. “Steel increased by more than 60% in 2022 alone. When a car consumes an average of 800 kilograms of steel, we realize what this means in terms of cost,” he adds.
More than the pandemic, which unbalanced the relationship between supply and demand in the automotive sector, the war in Ukraine and the ensuing energy crisis was one of the main causes of the recorded increases. In fact, if you compare the price of the cheapest available version of the Volkswagen Polo in 2021 and 2023, it turns out that the value has increased by 19.6%, from 18,640 euros to 22,291 euros. “Cars have suffered from inflation [ao longo dos anos]but they have now suffered much more because the whole production chain is much more expensive due to the exponential increase in energy costs,” emphasizes Hugo Barbosa.
Nuno Castel-Branco, director general of Standvirtual, sees the discount policy as another factor that may have contributed to the price increase. “Portugal was typically a market where new cars had a lot of discounts. There were certain cars that used to have a 15% or 20% discount and now they don’t,” he justifies. As for the possibility of cars falling in value again, the sector specialist does not rule out this scenario with a progressive decrease in demand. “As soon as there is an excess of stocks on the manufacturers’ side, this policy of discounting can return,” he says.
According to the National Institute of Statistics (INE), the consumer price index for motor vehicles in February this year showed a variation of 6.96% compared to the same period of the previous year. However, the analysis of five of the best-selling utility models in Portugal, conducted by Dinheiro Vivo, shows that the price of these vehicles has increased by an average of 22.6% since 2019.
Turnover in slow recovery
Despite the challenges the sector has faced over the past three years, with a pandemic and a war in the middle, Portuguese consumers continue to look for new cars.
According to figures from the Automobile Association of Portugal (ACAP), the national market registered a 2.8% increase in new registrations in 2022 compared to 2021, but still 30.8% below 2019 figures. The recovery has been slow and the difficulty in getting vehicles delivered has contributed to more restrained sales growth.
More than 21,000 passenger cars were registered in March, representing a growth of 60.1% from the same month in 2022, according to ACAP, but a decrease of 13.9% from March 2019.
Source: DN
