Industry experts clash on resales performance, remarketing reveals

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Prices rise claim auction houses, but trade guides report declines, Dean Bowkett discovers.

As we progress into the penultimate year before Brexit (if you ignore the indeterminate transition period) it’s worth looking back at 2017 now the final figures have been reported.

New LCV sales dropped to 362,149 in the UK last year which is a 3.6% fall compared with 2016. But it is still the third highest performance in the past 10 years. 

By contrast, the rest of Europe saw LCV sales rise by 3.9% to just in excess of two million units. 

However, the results were reversed in December where an 18% drop in Italy and a 3.9% fall in France put the EU28 and EFTA3 down 3.9% compared to a 2.9% rise in the UK, making 28,016 registrations in the month. 

Cap HPI noticed a 2.4% increase in daily rental volume which represented 15.7% of the total 2017 new van sales compared to 14.8% for 2016.

This means we may see an increase in younger used vans entering the market at the backend of 2018 and into 2019.

This year is unlikely to be much improved on the new LCV sales front, but expectations are that the rate of decline will be far lower, around 1.5% at the most for the year, although the team at Cap HPI is slightly more positive saying it expects new LCV sales to remain flat. 

Tim Spencer, commercial vehicle sales manager at Shoreham Vehicle Auctions (SVA), also predicts a reasonable 2018 but cautioned it with the caveat that “as long as the economy keeps showing signs of growth and unemployment remains in check, then demand from SMEs for new vans looks set to remain strong”.

On the used front, the last month of the year is always a challenging time for LCV sales as buyers progress through an early December stocking frenzy to then winding down in the run up to the festive period. 

Andy Picton, Glass’s chief commercial vehicle editor, reported used LCV sales volumes fell by 41.2% month-on-month due to the shorter selling period, but this was still 3.7% higher than December 2016, a trend we have seen for virtually the entire year.

Picton also noted that traders are reporting a decline in footfall across their sites, but this was only to be expected at that time of the year.

Spencer says SVA had seen a “well behaved” market for the whole of 2017 with December seeing “strong sales with buyers topping up their stock in readiness for what the market predicts as being a strong January.” 

He went added that the first sale of 2018 had plenty of entries with “a good mix of age and mileages”, although he also noted a change in buying habits with “up to 70% of bids at a typical Shoreham sale now coming from online buyers”.

From a pricing perspective, it seems to be a mixed bag of opinions with the auctions seeing improvements and the trade guides reporting falls.

Glass’s saw used values fall by £109 overall from the previous month, with medium panel vans particularly struggling, down £299 in December. 

But, allowing for the fact that it also noted the average age of all LCVs fell by five months to 62.8 and mileage dropped marginally by 1,088 to 73,048 miles, the underlying drop in used prices is noticeably more. 

Glass’s did acknowledge that values in December were still £87 higher than December 2016, continuing the positive pricing momentum seen throughout the year. Cap HPI also noted values dropping by 1.1% in December. 

By contrast BCA reported December sales prices hitting a record high of £6,976, which is a 2.7% increase over November and a whopping 9% increase over December 2016.

Like Glass’s, BCA also saw the average age falling, with the average age in December down to 49.05 months from 53.14 in December 2016 which does temper the scale of the increase although is that enough to see the drops reported in the guides? 

The seasonal wind down also reportedly impacted conversion rates with Andy Picton seeing first time rates of around 73.9% compared to 80.2% in November and 84.2% in October, but January is expected to see this rise again. 

BCA LCV operations director Duncan Ward has already said that the early “signs are the market has returned strongly in January, with good attendance at sales since the turn of the year and plenty of activity from online bidders”. 

In terms of the most popular vans, in the small vans sector Picton says it is “controlled by the Ford Transit Connect, the VW Caddy, Citroën Berlingo and, to a lesser degree, the Fiat Doblo”. 

Among the medium panel vans, the Custom, Transporter, Trafic and Vivaro remain the most sought after, although Picton noted that crew vans and Kombi versions were attracting “huge premiums”. 

Despite it being prime 4x4 season, Glass’s says December and January have been disappointing with pick-up conversion rates “12.7% down on November and 11.7% down on December 2016” with prices also falling.

Picton noted that average prices were nearly £1,000 down over November and nearly £2,000 down over the previous year.

As in previous months, condition remains a key factor, capturing the best prices and the quickest sales as buyers seek vehicles they can turn over quickly for good money.

Ward noted “plenty of interest for any vehicles with a retail-type specification” and, more interestingly, it is not just your run-of-the-mill vans doing well, with plenty of interest also in vans with “an unusual configuration or special equipment”, he adds. 

This could be a good sign that even specialist businesses are now feeling more confident about changing their fleets.

Cap HPI also expects good quality used vans to be the most sought after in 2018 “as the logistics sector continues to boom” thanks, in part, to online sales.

Stock of used vans is also becoming increasingly available according to Glass’s.

This may be why buyers are becoming fussier which is helping to increase the price gap between the best and worst condition vans on offer. Spencer at SVA also reports good levels of used van supply, citing the “strong new van market in 2013” as the cause.

With all parties reporting average van ages falling pretty much across the board and supply increasing, it is becoming clear that businesses are feeling more confident and are happier to rotate vans on a more frequent basis. 

BCA reported the average age of fleet and lease vans dropping from 41.15 months to 38.03 year-on-year.

With mileage reducing by 10% to 56,605, it adds weight to the view of renewed business confidence and an increasing rate of fleet turnover.

This is all good news for new and used vans sales volumes but there will be a tipping point when prices start to be impacted and this could happen during 2018. 

While BCA noted a 0.4% increase in fleet and lease LCV values in December over November, it is worth remembering that November had seen values drop by 1% compared with October.

The situation is even more noticeable for part-exchange LCVs where values fell 6.4% to £4,215 according to BCA.

This is still 5.5% up on December 2016 but the December 2017 vans were three months younger and had 6.3% fewer miles on the clock, 84,453 in December 2017 versus 90,101 for December 2016.

In summary, new LCV sales look to be stabilising, used LCV sales continue to remain strong but the increase in supply may start to impact prices as we go through the year.

It may be worth putting a little more consideration into the state of the vehicle at the point you sell it.

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