Summer has arrived, following a mild and dry spring; it is starting on a cool and wet note. However, it is early days with the likelihood of some nice weather to come. The political backdrop continues to be a distraction to customers with the delay to Brexit, an imminent change of prime minister and the chance of a general election.
During the last quarter, dealer feedback suggests order intake continues to be behind last year. One major challenge for the market is the reduction of younger families buying new units. Tourers are now much more expensive: only ten years ago, a highly specified unit would cost around £20,000 with entry-level examples from as little as £10,400. However, £20,000 is the average price today, with models retailing up to £35,000. Consequently, this is pricing many families out of the new tourer market, with those who retain interest in caravans looking towards a used van instead.
Another issue is the towing law, affecting those who passed their driving tests on or after 1st January 1997. There is concern about a lack of understanding among potential customers with what the law actually means. Some people believe you cannot tow anything unless drivers take an additional test. However, this is not the case and it is essential to understand the rules and regulations.
If you passed your driving test on or after 1st January 1997, drivers can
- drive a car or van up to 3500kg maximum authorised mass (MAM) whilst towing a trailer up to 750kg MAM
- tow a trailer over 750kg MAM as long as the combined MAM of the trailer and towing vehicle is no more than 3500kg
If drivers want to exceed these limits, they need to take a trailer-towing test.
Whilst unsold 2018 models are now clearing from forecourts, availability of 2019 models is still high. This is at a time when manufacturers are increasing pressure on dealers to discount and reduce profit margins on 2019 stock to make way for 2020 production. Interestingly, some dealers are reporting that manufacturers are already offering discounts on 2020 stock.
According to latest figures released by the National Caravan Council (NCC), production was down 15% between January and April 2019 for UK units. Factory invoiced sales also saw a decline of 18.4% in the same period.
- Demand for two, five and six berths was lower than last year
- Four berths and twin axles faired strongest
- 8 foot wide vans are still selling but a number are purchased to site, rather than tour now
- Margin retention is similar or weaker compared to the same period in 2018
- Customer finance penetration is broadly similar, with the majority of take up still 10-year HP deals
The news was more positive with dealer feedback suggesting sales during the last quarter were ahead of the same period last year. With economic uncertainty reducing consumer confidence and increasing new prices, more customers are looking at the used market as a more affordable choice.
- Demand for two berths fared better than new, reported to be broadly in line with last year
- Demand for all other berths including twin axles was also broadly in line with the same period in 2018
- Transverse island beds remain the preferred choice
- Twin single beds have been less popular recently
- Stock availability thought to be similar to last year
Sales of new tourers in 2019 are likely to finish behind 2018, which in turn was not as good as 2016 and 2017. Although a lull in the market is common following a few strong years, the political backdrop has no doubt intensified this further, particularly during recent months.
In contrast, the used market has performed more strongly. However, moving forward late used vans could suffer due to heavily discounted unsold 2019 models as the season ends.
For this edition, taking into account the time of year and the market place, values have been reduced across the board, except where trade feedback or evidence from the market place has indicated further adjustments where necessary.