Overview of 2016
2016 has come to a close and it’s certainly been a year to remember! It started with a mild winter, but a disappointing spring coincided with an early Easter, which slowed demand at the same time. Summer featured a rather indifferent start, but fortunately it quickly gave way to warm and dry conditions which continued throughout September and into October. So the good old British weather did come up trumps for the industry in the end, encouraging sales of new and used units nationwide. However, what really dominated the headlines of 2016 was the Brexit result on the 23rd June. Meanwhile, PCP was also introduced to the touring caravan and motorhome markets in August which was indeed very exciting for the industry creating much interest and further boosting sales opportunities.
The Brexit result took many by surprise and inevitably created much uncertainty for our country. However, as reported in our last edition, there didn’t appear to be much initial negative impact on the market and according to feedback from dealers and manufacturers during the last quarter, this continues to be the case with positivity continuing unabated. Many dealers felt that the NEC show was going to be a good indicator for the 2017 season and feedback was indeed positive overall with some feeling that Brexit could be a benefit to the UK market as it could encourage more people to holiday in the UK and consider entering the leisure industry. Recent world activity continues to be thought to have played a part this year, too, by encouraging a growing number to holiday in the UK. Indeed, a number of dealers have seen an increase in newcomers to the market this year. Also, an increased number of people are choosing caravanning over camping due to the unsettled nature of our weather.
PCP was introduced in August to the motorhome and touring caravan markets and created much excitement in the industry. However, it was at the NEC show where this was really promoted and according to dealers and manufacturers at the show, they received lots of promising feedback and interest. Some believe that it will work better for motorhomes than touring caravans but it’s very early days and it will be a few years before the effects are really known. Needless to say though the introduction of PCP is certainly good news for the market.
The NEC show took place between 11th and 16th October and the atmosphere was vibrant and upbeat with many reporting a good start to the 2017 season with order intake being up on the start of 2016. Moving forward into 2017, there is the caravan and motorhome show at Manchester’s EventCity from the 19th to 22nd January, Caravan Camping and Motorhome show at the NEC from the 21st to 26th February, plus various local events, so there is plenty in the pipeline to keep the industry busy and will no doubt contribute significantly to volume sales.
Feedback from retailers suggested that sales in 2016 for new vans was positive overall with the main issues being stock availability with unit levels running low early in the season.
In terms of demand for new vans in 2016, feedback for 2 berths was rather mixed, although there was still sufficient demand to take the supply. Demand was generally buoyant across the rest of the board but it was the fixed island bed layouts which really stood out as being a success. Margin retention and finance penetration were also reported to be up overall on 2015.
Used sales were said to have increased generally in 2016. Demand for used 2 berth vans was mixed but like new, there was still demand. As with new, fixed island bed layouts proved very popular, whilst desire for family units showed an increase in demand over 2015. Meanwhile, used stock availability was difficult particularly for larger 5 and 6 berth family units.
Some dealers reported that sales quietened earlier in 2016 after they remained buoyant up to the end of 2015. However, 2015 was thought to be an exception probably mainly due to the persistent run of very mild weather towards the end of the year. Interestingly, it was said that the season has extended in recent years with high activity seen in both December and January.
So, it whilst it would be fair to describe 2016 being a somewhat volatile year, particularly with the political landscape, the market has remained buoyant with lots of positive feedback. Although post Brexit uncertainty will continue for some time yet, current signs indicate that 2017 is likely to be another good year for the leisure industry. Indeed, it will be interesting to see where the market stands at the NEC show in February as this should be a good pointer for the remainder of the season.
According to the latest figures from the National Caravan Council, which cover the period to the end of October 2016, production for touring caravans intended for UK distribution was 10.9% up compared to 2015. The moving annual total rose from 19,236 units at the end of October 2015 to 21,366 at the end of October 2016. Comparing month on month totals for October 2015 and October 2016, production was 10.2% down. Factory invoiced sales in October were 13.6% lower than they were in October 2015. However, up to the end of October, they were 12.5% up year to date, so it reflects that 2016 has been a positive year overall. Meanwhile the moving annual total has increased by 11.9%. After seeing a large increase in July 2016 compared to 2015, export production has been down since and was 54.9% lower in October 2016 compared to 2015. Indeed, with the exception of February and July, production has been lower for all other months of this year compared to last. The moving annual total is now 21.4% behind last year.
Feedback from dealers during the last quarter continues to suggest that the market has maintained a positive vein with the majority reporting order intake to be up on the same period last year, whilst margin retention was said to be at least level or higher. As reported before, Brexit continues have little if any negative impact on the industry. However, we will have to see if this changes during 2017.
The majority reported Customer finance penetration had increased over last year and in some cases by a considerable margin. Very much in line with feedback from the show, PCP is creating lots of interest and has contributed noticeably from a sales perspective. The few dealers that commented that they had not yet seen much interest to date for PCP could be due to their location in more affluent area’s. However, they still reported customer finance penetration to have increased on last year. So, although it’s very early days for PCP, it seems to have started in a positive vein and will be interesting to see how it much business it facilitates during the 2017 season and coming years.
Whilst demand for 2 berths does continue to be a little mixed, the majority of respondents reported it being down on last year. However, despite this there is certainly still a market for them. Demand for 4 berths was thought to be level or higher than last year and demand for 5 and 6 berths was said to be slightly up overall. Very much in line with the recent trend, fixed beds remain the most popular layouts particularly island beds. Meanwhile, demand for side dinette end washrooms has decreased.
Feedback on stock levels was fairly consistent across the board with many dealers ordering at least the same amount of stock for 2017 as they did in 2016 but a number were cautious not to over order. Some dealers stated that they had already sold out of certain vans and availability is the main issue despite them ordering more, indeed some have already sold 50% of their product for the year to date. A few dealers are holding more units as a result of them taking on additional franchises this year. It was suggested that some manufacturers need to hold back on vans rather than allocate them all at once to help maintain availability throughout the whole season.
The used market continues to be reported as buoyant, as has very much been the case all year and sales were said to be level or up this last quarter compared to the same period last year and are ahead of 2015 volumes overall. Indeed, a few respondents had a record breaking year in 2016. However, a few dealers reported sales being down on last year and felt the market had seen a drop due to the internet hindering sales and stock availability. As with new sales, there continues to be little concern about the effects of Brexit at the moment.
Demand for 2 berths was reported to be lower this last quarter compared to the same period last year. However, some dealers described high levels of demand particularly on late models, so as with new units, there is still a market for them but they are generally more popular as a used choice. Demand for 4 berths was said to be overall slightly stronger than the same period last year and like with new tourers, transverse island bed layouts continue to be very popular. Conversely, demand for end washroom side dinette layouts is faltering. Family focussed 5 and 6 berths were said to have slightly gained appeal over last year but as has been the case for some time, availability remains the biggest issue with turnover being very rapid.
Stock levels were described as being lower across the board, particularly on 5 and 6 berth family tourers. A number of respondents stated that availability had been more difficult in 2016 overall. However, others had more used stock due to increased volumes of new sales generating more part exchanges, so it wasn’t all bad news. There were comments that lots of 4 berth end washroom side dinette units are in the market which was in line with many reporting a decline in demand for these layouts. During this last year, some feedback has suggested stock levels had been better controlled. Following on from the success of the NEC show in October, more part exchanges should start to filter into dealer stocks and with the prospect of members of the public selling up at the end of the season, used stocks should go some way to be replenished prior to the 2017 market gets into full flow. So, hopefully used stock levels could fair better in 2017.
Due to the time of year, Touring Caravan values for this edition of the data have been held except where trade feedback or evidence from the market place has indicated other adjustments where necessary.
Leisure Vehicle Editor
Holiday Home Editorial
Another positive year makes the crash feel even more like a distant memory.
The National Caravan Council confirmed that as of October, 17,505 holiday home units were produced in total to date during 2016. That is a 7.7% increase on last year and as for dispatches, 17,090 factory invoiced units have been moved onto holiday parks. That is a 6.6% increase on last year. The statistics represent another year of steady and consistent growth which is very positive. The outlook for next year is good, with most members within the industry carrying a cautious but confident mentality.
Overall, sales have appeared to be steady for the year. New sales appear to have been very strong, with some dealers reporting they have invested in new stock more than ever. It seems the used market has not quite hit the same heights though. Some dealers have reported extreme fluctuations month on month with used sales, but generally speaking are pleased overall. Similar to other caravan areas of the Leisure industry, there is a major stock shortage of good and clean condition used units. This has caused hardship over the last few years and particularly in 2016 but times appear to be changing. Though used stock will continue to be hard to source next year, there seems to be a steady stream of 2012 units becoming available, which will hopefully boost the used sector for 2017. Not only are these homes not particularly old but most will carry the much sought after double glazing and central heating specifications. The vast majority of consumers see that spec as an absolute necessity and due to this the older, around 10 year plus aged units, are fading in popularity the majority of these are non-spec too, so it is no surprise.
This year has seen the BS3632 standard unit’s sales become much stronger. What with the used stock shortage and the huge desire for consumers to have double glazing and central heating in their holiday homes, purchasing a BS3632 models goes hand in hand. Perhaps 2017 could be the year it really takes off for them? Separate lounges and two bed units have also been popular this year, with feedback from park operators saying the £30-45k price bracket has been vibrant which suggests consumers do have the money to hand.
A key element to this year’s good fortunes has been the weather. The year has been dry and the summer hot, which enticed a lot more people to holiday in the UK and subsequently purchase a holiday home. This could be essential for 2017 to also enjoy a positive year with the consumer mind-set becoming much more confident in the British summertime and annual weather overall. Another huge factor that could result in more investment into the industry is the sad risk of terrorism in formerly popular holiday destinations.
This also goes hand in hand with the referendum result, especially if triggering Article 50 causes the already predicted drop in confidence of holidaying in Europe. Brexit has already shown signs of some negativity in the industry though as prices for European materials used in the manufacturing of caravans have risen. This could turn manufacturers to purchasing locally made materials, which would only be a good thing. There has also been a rise in the temporary accommodation market, with companies starting to purchase better and more expensive units for employees.
The 2016 plate line has been added for this edition of the data. The majority of values not affected by the inclusion of the new plate line have been held due to the strength of the market currently.
As 2016 ends, excitement is high going in to 2017
According to figures released by the National Caravan Council, statistics show a continued growth in Motorcaravan sales volume in 2016. As of October, first registrations were at 11,216 for the year, which is a 16.9% rise on 2015. Used registrations were at 49,144, which is a 12.5% increase on 2015. The growth this year has been extremely consistent and echoes back to all of the feedback received from Glass’s correspondents throughout the industry. The vast majority of dealers have had a very positive year which suggests a lot of confidence and excitement will carry forward into 2017.
October saw the arrival of the much anticipated NEC Motorhome & Caravan show, which by all accounts was a huge success. Official statistics released by the organisers report that overall attendance numbers were up 5% on last year and it was the highest attended show in its history, which can only be great for the industry. General feedback has been overwhelmingly positive with a lot of manufacturers and dealers exceeding sales targets and having their best ever year there. Attentions turn to returning there in February, in which hopefully we will see similar amounts of business and physical turnout.
Over the last quarter of the year, sales within the new market seem to have carried on at strong levels, resulting in many dealers being up on last year in terms of sales and profit. The main factor behind this must be to do with the infamous used stock shortage. The huge scarcity that has been evident for a long time now appears to be a downward spiral making sourcing vehicles harder by the month. Due to this we have seen notable increases in used motorcaravan values which has lured a broad number of consumers to buying new models instead. The competitive pricing structures that new units offer, along with finance and the novelty of being the first person to own the motorcaravan, have all been integral selling points for buying new over used. The delivery of 2017 stock has been slow across the board but the turnaround of delivery to sale has been extremely quick.
Despite the hardships of the used stock shortage, reports suggest that used sales are holding their own. Many dealers have fed back that they are up on sales and profit, if not at least on par with last year. As the shortage has become worse many people within the industry have become accustomed to the problems faced and found individual ways of dealing with it. Sourcing stock is obviously the issue and this hasn’t been helped by the rising numbers of online marketplaces. The online consumer platforms encourage private sellers to seek to achieve a higher value for their motorcaravan than part exchange might return, and who wouldn’t try this when the industry is getting stronger each year? All signs indicate that next year will be much the same for used sales, but as the new market continues to soar the trade should start seeing more used units infiltrate the market in the next few years.
In terms of the most popular motorcaravan types and layouts this year, the unanimous winner has to be the van conversion. With their competitive pricing structures, smart and modern looking designs, and all round practicality, they have been very sought after. On the flip side, there appears to be more consumer confidence in purchasing bigger layouts, particularly large coachbuilts. Sadly, there still seems to be a real lack of interest in the industry within the 18-30 age demographic. The Blackhorse PCP packages could be a great way of helping the younger generation into the industry, but the scheme has yet to fully take off. It remains to be seen if PCP deals will ever grow as influential within the market as they have for the car industry, opinions appear to be mixed with a lot of feedback suggesting the traditional 10 year finance deals are more manageable and appealing, and also there are a lot of consumers with money to hand. This needs to be monitored closely over 2017 as it could really be a huge hit within the industry.
Over half a year on from the Brexit result, opinions are still varied as to how or if the motorcaravan industry will be affected. There has been a slightly negative position with the value of the pound dropping although this will make UK converted motorcaravans look more appealing than European versions. We have seen slight price increases with European manufacturers to date but it remains to be seen if there will be any further impact at this point.
The 1616 plate line has been added for this edition of the data. The majority of values not affected by the inclusion of the new plate line have been held due to the strength of the market currently.
Leisure Vehicle Editor