Sep 24, 2014

Used Car Market in Bulgaria - Where is The Data?

Couple of weeks ago I shared some difficulties that come with forecasting the new cars market. This market is interesting for marketers for obvious reasons but it forms the smaller portion of the total car market. The second hand car market got my interest and I looked around for some data. I focused my curiosity on my home country and I would like to put some popular myths against hard data. It turned out that there is virtually no data at all and I had to do some digging for details.

Market Overview
One might expect that car data is readily available. Cars are big and expensive things and at least three institutions keep detailed data for them. But there is not. The data is there but is expensive or is not offered to the curious ones. Bulgaria is also under the radar of the Europe-wide studies on this market, e.g. European second-hand car market analysis or The Used Car Market Report published by Centre for Automotive Management in Buckingham University. There is also a problem with sales of new cars as the association of the new car importers do not have this data for download on their site. The only way to get historical data is search for publications on the Internet which I did. There is no official Bulgarian source for the total market and the cars in stock and I turned to Eurostat Transport data where I found some top-level figures. In contrast to many other European countries, there is no break down on engine type, engine power and mileage but it was a start. After some Internet search and I compiled the data that is summarized on the chart below.

The source for the new registrations and passenger car stock is Eurostat and and the new cars sales come from various media websites. As you can see, there were about 2.8  million passenger cars in 2012 and the new registrations were about 197 thousand which is a good approximation of the total market volume. It safe to assume that current market as at about the same level as there have not been substantial improvement in the economy for the last two years nor legislation has been introduced to affect this market. There is nothing interesting in the market development after the drop of new cars market that followed the 2008 crisis. It is more interesting to see how Bulgaria compares with other countries in the ratio of used to new cars sold. It is slowly rising from 6.1 to 10.2 for the last five years. According to the The Used Car Market Report 2013  this ratio is at its lowest with 1.5 for Belgium and at its maximum in Portugal with 4.6. (See the chart below)

Source: The Used Car Market Report 2013, Centre for Automotive Management

Bulgaria is far from the European standards and it is way worse than the poorest of the rich EU members.

The drop in the car stock is due to the compulsory pre-registration to meet the EU license plate standards. Unfortunately, EUROSTAT does not have further details on Bulgarian car market as it does for many other countries and further details could not be extracted from it.

The Details
Top level figures are interesting for macro economists but I was more interested in the details as the market share for example. As there is no data available I decided to generate the data myself and turned to as the best and biggest automotive site in the country in hope to find more details. I wrote some code to scrape the site and generated a database with about 2800 car ads that recorded model, make, price, mileage, age, car type, engine type and power and the number of ad views. It is a snapshot of the current offerings and not the market itself. The set  of car ads reflects not only the current demand but also the types of cars owners want to get rid of for better one. However, it should be closer than anything else on hand. The ads are paid so they do not stay on the site indefinitely. I assumed that this database could be a starting point for further research so I gave it a shot. There are many ways to slice the data but I will stop just on few general findings for space and time considerations.

What are the top 10 brands?
The top 10 brands form more than 70% of all the ads. No surprises in this share distribution. The data supports the Bulgarian belief that Germans cars are the best cars and everything else is a compromise.

The presence of Lada in the top 10 list could be an indicator that data could be skewed toward older cars.

What is the age of cars on offer?
The chart does not need explanation and does not speak well for the economic state of the country.

What about the mileage?
The mileage corresponds to the  car age.

We should not forget that mileage is easily manipulated to make cars more appealing for the customer and may not be that accurate.

What are the top models?
The top 20 models are dominated by German brands. 

The preferences gravitate around the Golf-size and smaller cars.

It might be safe to conclude the data confirms the perception of brands share. Of course, the perception depends on the location - bigger cities have much better car park than the rural areas. We also tend to pay more attention to the nicer cars and the ones we would like to drive. I was bit surprised that cars  with lower age and mileage are so poorly presented as there are seem be many more newer cars on my daily commute. This could be part because it is true and part due to the fact I am looking at a snapshot of car ads and not the real sales.

Lack of car data in Bulgaria is not surprising considering the still present communist-style mindset of the institutions. A relatively good view on it could be provided by a regular scraping the auto sales sites to detect the dynamic of the market and generate useful information. The auto sites themselves could also make data available for a fee and provide some top level information for the interested public.

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