New Light Commercial Vehicle (LCV) Market
With the coronavirus lockdown easing and businesses beginning to return to work, the new light commercial vehicle market responded from the 74.1% decline in May to an improving 24.8% decline in June. Overall, 30,041 new LCVs hit UK roads during the month, with many supporting the continued fight against the COVID-19 outbreak.
Performance year-to-date has declined 44.6%, with 108,876 units registered during the first half of 2020. Although an improvement on May, this unparalleled crisis has resulted in further significant drops in demand across all sectors. Breaking the month down by sectors reveals registrations fell 50.3% for Pickups, 52.4% for Vans under 2.0 tonnes, 36.1% for Vans between 2.0-2.5 tonnes and 44.5% for Vans between 2.5-3.5 tonnes.
Top five LCV registrations
The latest April SMMT new LCV registrations reforecast for 2020 is down 28% to 263,000 units for the year. Lockdown has affected all businesses and with the continued uncertainty, there remains an underlying weakness in the market.
Although there is a gradual improvement in demand, the UK is still a long way off normal. The pandemic has affected many businesses, with those now restarting doing so at a reduced pace in response to a cautious buyer appetite.
The interconnected nature of the UK economy means that there is likely to be more uncertainty ahead as the UK grapples with a reduced appetite, business nervousness and potential regional lockdown measures. Moving forward, fleet renewals will be critical to a successful restart and the UKs long-term green recovery given the crucial role light commercial vehicles play.
June Used Light Commercial Vehicle (LCV) Overview
With auction houses still working towards full operational capacity, it has been quite incredible to see the recovery rate of the used LCV market. Since the easing of lockdown, auction prices have continued to strengthen, with pent up demand and short supply central to the resulting strong market.
Glass’s auction data suggests June sales were up 38.1% versus June 2019, with UK auction buyers adapting to the online world with sales and first-time conversions continuing to rise.
As online sales programmes increase, there is a definite appetite from trade buyers to purchase good quality stock and a good level of retail confidence driven by a number of factors. Grants for business rates, VAT deferrals and a hunger for people to get back to work are all playing a part in getting the economy back up and running. Supporting this enthusiasm is data confirming average prices across all ages and sectors have risen 32.5% versus June last year.
Physical auction sales restarted on the June 15, with many in no rush to reopen, with social distancing, safe vehicle movement and deep cleaning of all surfaces a continuing issue. Most buyers and auction companies are seeing the benefit and convenience of online sales, with this possibly the beginning of seismic shifts in the way UK auctions operate in the longer term.
June in detail
The average age of sold stock in June rose from 59.9 months in May to 64.8 months. This figure was 7.2 months lower than the same point last year.
Average first-time conversion rates stand at 86.5%, up dramatically from 54.9% in May and up from 72.1% 12 months ago.
Average mileage for sold vehicles stands at 69,652 miles, an increase of 3,894 miles on May and nearly 12,000 miles less than June 2019.
Glass’s continues to monitor the LCV market closely and has an open dialogue with auction houses and manufacturers, leasing and rental companies, independent traders and dealers as well as the main industry bodies. This information, combined with the wealth of knowledge in our CV team ensures Glass’s valuations remain relevant in the market place.