Commercial Vehicle Market Trend Jan 2017

Andy Picton

20 Dec 2016, Editorial

LCV Marketplace

November logged a record-breaking 29,784 new light commercial vehicle registrations – the most for 20 years and up nearly 2.5% on the same point in 2015. YTD registrations now stand at 348,448, a year-on-year increase of just over 2.0% and keeps the sector on track to beat the 2015 record levels.

Although the overall market remains strong and on trajectory for a record year, demand for larger LCV’s up to 3.5t dropped for the second month in a row, down 4.4% on November 2015. However, year-to-date, this segment remains 7.0% up and has accounted for 62% of the overall market so far.

Sales of smaller vehicles weighing between 2.0-2.5-tonne drove the growth in November with sales of 4,929 up 43.1% on the same point last year, whilst demand for pick-ups grew significantly with 3,911 units registered, up by 36.7% over the previous 12 months.

Although the full year figures are not yet available, it’s safe to say that 2016 has been a phenomenal year for the industry, with businesses buoyant and confidence apparently unaffected by our forthcoming exit from the European Union. It’s also safe to say that if we are to achieve similar successes in 2017 and beyond, it will be essential that the economic conditions that have kept this sector so buoyant in recent years will need to be maintained.

Ford again flexed their muscle in November by outselling their nearest rival Volkswagen by more than 2:1 – 8,652 units to Ford and 4,023 units to Volkswagen and in the process, extended their YTD total to 106,419 units for the year – over 30% of the whole LCV market for 2016 - and nearly 65,000 units more than the German manufacturer.

Sales of LCVs at auction rose 7.6% during November on the previous month and also by 7.6% on the same point in 2015 however, first time conversions fell by 1% to 81.5%. During the last month, the average selling price increased by £23 to £5,599 and by £678 on the same point last year. The average age of those sold at auction increased by 2 months to 65.3 over the period, but is down 1.1 months over the last year.

As is the norm, December slowed as we moved through the month and ever nearer to Christmas. With some of the major vendors announcing towards the end of November that they would not be entering fresh stock into the used market, some of the trade took that as an opportunity to take a well-deserved end of year break.

The reduction in entries has not stopped the hammer dropping at a rapid rate and in turn has ensured that the best stock has kept selling at ever strengthening prices. Traders have reported back to us that although they are loathed to pay too strongly for stock at this time of year, they also cannot sell empty spaces. So where necessary, they are looking for replacement stock to fill those gaps.

As a result, most sectors have seen their values firm over the last month with the cleanest stock with ‘car-like specification’ continuing to attract the most interest and the strongest values. High spec 4x4 models remain in demand with prices paid up month on month resulting in positive movements being recorded again this month for the best examples.

Generally though, anything with sensible miles and a FSH which requires only a modicum of preparation, is guaranteed to attract plenty of attention. This has resulted in prices for the best stock continuing to rise with traders resigned to paying more money to replace sold stock.

As we move into the New Year, we expect values for late year, low mileage stock to come under some pressure, which could last for a few months whilst manufacturers try to dispose of pre-price increase stock. However, once these have washed through, values should stabilise.

Light vans

In this sector, those with car-like specification and with metallic colours have received the most attention during the year. Scarcity has seen values firm considerably for this stock with prices regularly to Top Condition values for the best examples. In particular, Caddy, Fiesta Sport, Berlingo, Connect and Astra have performed well over the last few weeks.

Performance on the open market is always driven by supply and demand and this has remained the case throughout the year. Fiesta and Corsavan have continued to be seen as a good investment, whilst higher mileage examples of the ever popular Berlingo, Partner, Kangoo and Caddy have all found homes with ease.

Only poor condition examples and those models subject to being part of a big de-fleet have come under downward pressure during the year.

Medium Vans

2016 has seen this sector go from strength to strength with anything straight and with sensible miles attracting plenty of attention and strong bids. Transit Custom, Transporter, Trafic and Vivaro have all been consistent performers with prices continuing to strengthen.

The shortage of high spec variants in this sector during the first three quarters of the year has seen demand grow for the best stock, however certain ‘flat’ colours are not well received with buyers opting for metallic paint where possible. Q4 has seen a greater volumes enter the used market, but with little or no adverse change to demand or the prices being paid.

With their additional flexibility, Crew vans and Kombis have seen their values outstrip expectations over the last twelve months. Models with extra specification and/or higher horsepower have generally received plenty of attention however, the overall combination of model, spec, horsepower and colour has to be right to achieve best performance.

The niche 9-seat minibus/Kombi market came under pressure towards the tail end of the year when a number of identical models were de-fleeted. These were not received well and interest was limited which was reflected in the prices paid.

Large Vans

This sector has provided a mixed bag of success during 2016 with some surprising winners and losers. At best, this sector has been hit and miss with prices fluctuating on a monthly and sometimes weekly basis dependant on volume, colour, condition and mileage of the stock being offered.

Generally, the best performances have been reserved for PSA, Fiat, Renault and Vauxhall, with values firming to reflect a greater confidence in the product. 2016 has seen the ‘premium’ brands struggle with values coming under downward pressure for all bar the very best examples. Particular pressure has been noted on late year stock, where heavily discounted new or pre-registered vehicles have impacted on what a trader has been willing to pay at auction.

That said, anything 3-4 years old and offered straight and with sensible miles has sold with ease however, the wheat has had to be sorted from the chaff to find that tidy examples.

Chassis variants, especially Luton vans and LWB dropsides have fared well during the year, with even higher mileage examples selling freely. Fridges, typically had been hard worked and on the whole, had completed high mileages and had not returned the best results. The minibus market has been steady for 3.5-tonne GVW 15-seat examples and below however, once that threshold was crossed and the world of tachos, speed limiters and eligibility was entered, so values came under and continue to be under downward pressure. The 17-seat minibus market in particular has seen values come under a great burden all year, with this trend set to continue into 2017.

4x4

Interest in pick-ups started slowly with little appetite for tired or hard worked stock, and buyers holding out for the cream before parting with their hard earned money. This theme continued until Q3 when the weather and the demand changed. Since then, vendors have seen their stock, typically with high levels of specification and plenty of extras exchange hands for strong money.

The Land Rover Defender although no longer in production, has gone from strength to strength during 2016. The majority of interest has been reserved for the high specification XS and Anniversary models ideally on the Defender 90 however, anything straight and with a FSH has sold strongly. Damage normally would be an issue but has been largely overlooked as die-hard devotees have battled it out to take ownership.

HGV Marketplace

2016 has been a difficult year, with the used market stagnating due to a dearth of quality and an oversupply of samey ex-fleet tractor unit stock.

With the exception of the rare Euro 6 or nice piece of retail stock offered through the block, there has been little to get the buyer excited. There has been an oversupply of 4-6 year old 6x2 stock in the market which has seen their values plummet over the last 12 months. An oversupply of 6x2 stock has strengthened the market for 4x2 tractors a little too, especially those with larger fuel tanks. Day cabs though have fallen out of vogue with traders preferring those with big sleeper cabs.

Rigids have not fared much better, with only short term rental stock keeping traders interested at times. There have been exceptions and long bodied dropsiders and curtainsiders have been seen as desirable.  At the older end of the market, small numbers of dropsiders, boxes and curtainsiders have found homes in Eastern Europe.

Curtainsiders, boxes and fridge boxes gained most interest when coupled to a big sleeper cab, whilst bigger tipper and construction vehicles started the year in buoyant fashion only to see demand dwindle as the year progressed. Anything with a crane sold strongly if accompanied by its paperwork however, damage and missing parts soon curtailed any serious interest.

Trailers

The market for trailers has been near non-existent over the last 12 months with anything worth its salt snapped up quickly. Most of the stock on the open market has been run-of-the-mill or end of life with only a smattering of specialist stock keeping any semblance of interest. Low loaders and more recently, the right configuration car transporters has seen strong money at commanded at auction.

Wishing all our subscribers a happy and healthy 2017.

About the author

Andy Picton

Andy PictonChief Commercial Vehicle Editor

Having worked previously for Barclays Asset Finance and LeasePlan in the commercial vehicle sector, Andy joined Glass’s in 2002 as part of the Commercial Vehicle team working closely with manufacturers, leasing and insurance companies, traders, dealers and auction houses. He was promoted to Chief Commercial Vehicle Editor in 2016 and manages our industry-leading team of valuation experts. He loves football, music and obviously commercial vehicles.