2018 could finish behind 2017, but by no means is it likely to be poor.
With 2018 now well underway, it is the time of year to be thinking about the upcoming summer and holidaying. In terms of weather, the UK experienced a mixed winter with cold dry periods interspersed with milder and wetter periods. A traditional British winter really. However, late February saw the ‘Beast from the East’ affect the whole country that provided several days of snow and ice. Spring has also started on an indifferent note. After the dry and mild start to 2017, conditions have certainly been less favourable for the industry this year, but that is the good old British weather for you.
Economic uncertainty is still very much apparent and this is likely to continue for the foreseeable. It would be naïve not to expect this to have an effect and the consensus from manufacturers and dealers is that the 2018 season has so far been quieter than last year. Reduced consumer confidence is leading to cautious spending, that is causing some hesitancy to commit and in turn, is having a negative effect on the industry. The colder and wetter winter likely played a part, too. However, it has been far from poor, and the last few years have been particularly good. It was believed by some dealers and manufacturers at the beginning of the season that sales might plateau following a few years of growth, and there is currently no real cause for concern.
In terms of what is selling well new, the 8-foot wide vans continue their popularity. The extra width really makes a difference inside, so it is no surprise to note these are such great sellers. The transverse island bed layouts continue their success, particularly the centre washroom, end bedroom variants. Twin single beds are also in high demand. Although, 2 berths have been in decline during recent years, interestingly, certain models are actually selling very well, with the Swift Challenger 480, Elegance 480 and Lunar Cosmos 462 said to be popular. Meanwhile, the end washroom, side dinette models continue to decline.
Whilst it is likely that Economic uncertainty is also having an impact on the used industry, it is probably less pronounced than it is on new. Indeed, it could cause the market to strengthen, with those keen to own a touring caravan but not being able to commit to a new purchase, choosing a late used example as the more affordable option.
In terms of what is selling well, British built used vans in the older 2002-2010 category were reported to be popular, but transverse island beds remain the main focus. Meanwhile, 2 berth units continue to be a more popular used purchase than new. However, a number of dealers continue to state that they can be problematic when it comes to finding a buyer.
During recent months, the industry hosted the Manchester Event City Caravan and Motorcaravan show which took place between the 18th and 21st January and then more recently the NEC Caravan and Motorcaravan show from the 20th to 25th February. Despite footfall appearing to be down on recent years, many dealers and manufacturers remained fairly upbeat that 2018 will be a good season, albeit not likely to be quite so strong as last year. If 2018 does match 2017, that would be very good news indeed. Understandably, they are more cautious this year. Moving forward there are various local shows on throughout the country, so there is plenty to keep the industry busy and help maintain volume sales. With 2018 moving at a rapid pace, it will soon be time to start thinking about the 2019 season and the HERMCA Lawns outdoor show near Hull in September.
With Easter being early this year and Good Friday on the 30th March, this may encourage the season to gather momentum faster, but will be weather dependent.
According to the latest figures from the National Caravan Council, production of units intended for UK distribution was 0.3% down at the end of 2017 compared to the end of 2016 and 2.7% down in January 2018 compared to 2017. The moving annual total [m-a-t] of production remains ahead, however, with 22,062 units produced at the end of January 2017 to 23,380 units at the end of January 2018, a growth of 6%. Factory invoiced sales saw a small dip in December 2017 being 0.6% down on 2016 and in January 2018, they were 12.4% down on with the moving annual total [m-a-t] 4.2% ahead of last year. These figures do reflect a quieter start to the season.
Feedback from dealers during the last quarter was mixed but as reported earlier, the consensus was that order intake has been a little down on last year. Some dealers were expecting stronger sales because of their new model ranges. However, a reasonable number of respondents reported stronger levels of demand and a fair percentage who reported lower sales held the opinion they were only slightly behind that of last year. Several dealers said January and February were strong months, too. Few respondents believe the market is in a bad place and are confident it will bounce back during the next few months, so it is not bad news by any means at this stage for the industry.
∙ Feedback for 2 berths during the last quarter was mixed with the overall majority of dealers saying that demand was broadly in line or lower than that of last year.
∙ The trend for consumers to purchase 4 berth transverse island bed layouts as an alternative to the 2 berth continues.
∙ Demand for 4 berths was reported to be broadly in line with last year, with only a minority holding the view it was not so good.
∙ Demand for larger 5 and 6 berth family units was said to be broadly in line with that of last year. However, a few dealers believe their popularity may increase post Easter.
∙ Demand for twin axles was thought to be very similar this last quarter to the same period last year.
∙ Majority of dealers reported stock levels to be level or ahead of last year.
∙ A number of respondents said they have a better mix this year making it less likely for them to run out of popular units early.
∙ A few dealers stated they have too much stock at the moment due to sales not being as strong as anticipated.
∙ A small percentage of respondents said they are running out of certain models already.
∙ The majority of dealers are offering the same amount of discount as last year.
∙ Some respondents said they were discounting to higher levels in an attempt to generate increased sales, but other dealers prefer to wait until the season properly gets underway.
∙ Margin retention was reported to be broadly in line with last year.
Customer Finance Penetration
∙ Customer finance penetration was said to be similar or down on last year with 10 year HP continuing to be the main focus, with few PCP deals.
∙ Increased competition and self-funding has hindered customer finance penetration for a number of dealers recently.
Similar to new, feedback this last quarter was mixed and despite the overall majority of dealers reporting sales to be broadly in line with last year, a high number held the belief that they were not as good. However, as with new, some respondents said demand was only slightly behind and a few actually had a record-breaking year in 2017. A number of dealers stated that January started on a strong note but then experienced a lull. Curiously, a few respondents explained that although sales and demand had been tougher during the last quarter, profit retention was stronger than it was two years ago.
∙ Demand for 2 berths was reported to be broadly in line overall with last year.
∙ Demand for 4 berths was believed to be broadly in line with last year with fixed bed layouts continuing to be the focus.
∙ Family focused 5 and 6 berth vans, plus twin axles have experienced consistent demand, although, like with new, some dealers hold the view demand will accelerate post Easter for these family layouts.
∙ Stock availability was thought to be broadly similar this last quarter or better than it was during the same period last year.
∙ Some dealers continue to find it difficult due to increased private sales and have to be more proactive in sourcing stock.
∙ A high number of 4 berth transverse island beds continue to filter back into the market.
∙ Some dealers have seen an increase in later year 2013/14 model year vans coming through as part exchanges recently.
∙ Dealers own stock levels were reported to be broadly in line overall with last year.
∙ The greatest difficulty continues to be 5 and 6 berth family units.
For the April edition, taking into account the time of year, values have been held across the board, except where trade feedback or evidence from the market place has indicated other adjustments where necessary.