The 2020 season is well underway with key holiday periods fast approaching. Although winter was very wet it was very mild but there was no repeat of the 2019 record temperatures. Creating some positives for consumer confidence in the market was the successful BREXIT in January.
However, today the main issue is the rapid spread of Coronavirus (COVID-19). The impact of this in the UK is already significant. Restaurants, pubs, theatres and cinemas are already closed. Today is the first day of a three week lock-down with the UK waking up to new curbs on life after Boris Johnson’s speech from number 10.
Touring caravans: new market
Feedback from dealers during the last quarter suggests order intake was similar to last year. Some traders hold the view that staycations will increase in popularity as individuals become more environmentally aware stimulating demand in the caravan market. Additionally, as motorhomes become more expensive, there is a possible emerging trend of motorhome owners returning to caravan ownership. There are also some negative concerns among consumers about the ban on internal combustion engines being brought forward to 2035 with question marks over electric vehicle towing capabilities and the detrimental impact on range.
Unsold 2019 models in the market are reportedly selling, and with the majority of dealers ordering less stock for 2020, this should limit the number of carry over models into 2021 should the market continue to follow its normal seasonal pattern.
During recent months, the industry hosted the Manchester caravan and motorcaravan show, which took place between the 16th and 19th January at Event City and then more recently the NEC caravan and motorcaravan show from the 18th to the 23rd February. According to the NCC (National Caravan Council), attendance figures were 2.2% down on last year at the NEC. Although footfall was strong on certain days, the general consensus was that sales activity was mediocre.
Moving forward, there would typically be numerous local shows throughout the country. However, due to current circumstances, cancellation of many of these is likely.
Market Statistics January 2020 vs 2019
- Production of units intended for UK distribution was 21.1% down.
- Moving annual total [MAT] for UK distribution was 13.8% down.
- Factory invoiced sales saw a downturn of 17.7%
- Moving annual total [MAT] for factory invoiced sales was 17.1% down.
- Demand for all berths including twin axles - broadly in line with last year.
- Some dealers have experienced an increase in demand for twin axles.
- Island beds with centre washroom continue to be the main focus with 8-foot wide vans also attracting strong demand.
- Majority of dealers are offering similar levels of discount as last year.
- Margin retention is broadly the same as last year.
Most dealers held the opinion that sales were broadly similar to last year with the majority of demand continuing to focus on transverse island beds. Some dealers have seen an increase in newcomers to the market this year which is good news.
- Demand for all berths including twin axles was broadly in line with last year.
- Stock availability during the last quarter has been similar to last year.
- Majority of dealers are satisfied with their stock levels, although some are running short due to fewer part exchanges.
- Some traders are experiencing a stagnant market, similar to the new market.
At the end of 2019, the prospects for 2020 largely depended on the BREXIT outcome, with the potential for a stronger year if the UK exited the European Union. Whilst this happened, the spread of the Coronavirus has overtaken the BREXIT discussion with the serious consequences for the UK and the World. Despite potential positives for the industry, the future is more uncertain than ever as the world enters the unknown.
For this edition, based on the current market, the majority of values have been held, except where trade feedback or evidence from the market indicates further adjustment where necessary.