Easter trading drives leisure vehicle market annual results

Easter trading drives leisure vehicle market annual results

Glass's

23 Mar 2018, Blog Post

Easter trading drives leisure vehicle market annual results

Trading over the Easter period is a barometer of the annual results in the leisure vehicle market and this year like the last four years will have a special significance for the market.

  • Will sales return?
  • Will the market stall under the pressure of falling incomes and economic fears?
  • Will the rental business inject new life into the market?

The trend towards holidaying in the UK – so called “staycationing” – has been driven by a reduction in the number of affordable destinations in Europe.

The result has been more people opting to stay in the UK and taking their chance with the fickle British weather. Consequently, sales of new and used motorhomes and touring caravans have been rising over the last four years. However, it is beginning to look as though things are about to change again.

Visitors to last autumn’s Caravan, Camping and Motorhome Show reported that it seemed quieter than in previous years. After an inconsistent autumn, the industry is nervous. Although figures have begun to recover in the first quarter, the recent cold weather has dented market confidence.

Touring caravan market

In the touring caravan market, there are hopes of a resurgence with the recent launch of Elddis’ 8ft Super Sprite followed by a similar size van from Swift. Paul McDonald, Leisure Vehicle Editor at automotive intelligence provider Glass’s says: “Some dealers have had a strong start to the season although autumn was quieter than expected. Everyone is looking to Easter to see if this confidence will last.”

There is cautious optimism in the used sector. McDonald quotes one dealer who told him: “Following last year’s record season, so far this year we are only three or four units down.” McDonald predicts that residual values will hold in the first quarter with some popular models selling over the guide price.

Motorcaravan market

The outlook in the motorcaravan market is more uncertain, according to Jordan Conte, Glass’s Leisure Vehicle Editor. He quotes one dealer who summed up the current market: “Things couldn’t be going any better but it feels like the market could fall off a cliff at any second.” So why the attack of the jitters? Despite the record growth of the last four years, the sector remains small. “The huge growth year on year is hard to replicate for a fifth year running,” he says.

On top of this, prices have started to rise this year. Informed customers bought in advance last year to avoid price increases. Nevertheless, Conte says that although dealers are reporting that footfall is down so far this year, they also say their sales conversion rate is up.

Part exchange

Another factor troubling dealers is a move away from part-exchange, traditionally the engine that drove the used market. Increasingly, says Conte, owners are opting to sell vehicles privately which deprives dealers of good used stock and makes it harder for them to create attractive packages combining good trade in values and discounts on new prices. “The problem is that people get a trade in quote and then look at the prices being achieved by private sellers online and think they might as well go that route,” says Conte.

Rentals

The rise of motorhome rentals is another factor that is changing the market. Manufacturer Swift set up Swift Go to rent their vehicles directly to holiday makers and Australian motorhome renter Just Go has now entered the UK market too. Now people who feel priced out of the market can hire a motorhome for a short break for a few hundred pounds.

As if things were not changing fast enough, Camplify has brought a new take to this already fast-moving scene. Camplify has been described as “the Airbnb of the camper van world”. Individual owners can rent out their motorhomes through Camplify’s website which suggests they could make as much as £31,000 a year from doing so. Conte says this latest development may be a blessing in disguise for the market as a whole. “If people can get back some of the money they spent on their motorhome, they may be encouraged to trade up to a better model,” he says.