Insight: Online sales hit record levels

BCA Pulse

Online sales hits record levels at BCA and Manheim, close to 40% and 34% respectively.

Year-on-year average auction prices rose in March by several hundred pounds, but it is younger stock which is driving the increase rather than buyer demand, which has started to soften.

That’s the view at BCA, where the March average of £6,526 was a small fall of £23 on February but was still its second highest value on record. Year-on-year, average values are up £647, equivalent to an 11% rise.

But don’t be fooled by the headline figures, warns BCA LCV operations director Duncan Ward. Demand is softening.

“Average selling price data might suggest a buoyant market, but the reality is the market has weakened and conversion rates have been under pressure,” he said. “BCA’s profile of stock is becoming younger and lower mileage and this is a significant driver of the increasing values we report.

“As often is the case when demand softens, a two-tier market develops. Well specified commercials in retail-ready condition are making exceptional values, while vehicles with an unusual configuration or special equipment will always attract attention from buyers. In contrast, any LCV available in high volumes, perhaps with damage and a basic specification, will have an uphill battle to attract interest.”

The market for lifestyle double-cab pick-ups remains “fickle”, Ward adds, possibly a reflection of another mild winter together with increased volumes and choice. 

However, internet sales continue at record breaking levels, with BCA Live Online now accounting for almost 40% of auction business.

As usual, the two main auction houses have a different take on the market. Where BCA warns of softening conversion rates, Manheim reports a 3% month-on-month rise for van sales conversions in March, despite a 6% increase in volume. 

They are also up year-on-year: in March 2016, conversion rates were around 60%, but they exceeded 70% in 2017.

Matthew Davock, head of LCV at Manheim, said: “In the first quarter of 2017, we offered a record number of vans at our auctions, with 20% more volume compared to the same period last year. Despite having more vans to sell, we have seen robust sales performance since the start of the year, selling 10% more vans in March than we did in February and 21% more than we did in March 2016, alongside conversion rates hitting record levels last month.” 

Another point of difference between BCA and Manheim is stock age: BCA’s profile has got younger, but Manheim’s has aged – at least in recent months. 

The average selling price of vans sold at Manheim in March was £5,298, slightly down from February, but in terms of stock profile, age and mileage both increased month-on-month, by three months and 2,000 miles respectively. Average age hit 63 months and average mileage was 75,000. 

However, year-on-year, BCA and Manheim agree: average values have risen because stock age has fallen. 

Manheim’s average selling price in March was up 11%, with age and mileage four months and 7,000 miles lower, compared to March 2016.

Davock said: “During March, our buyer footfall and clickfall remained strong, with footfall slightly improving over both January and February. Online attendee audiences continue to increase and perform ahead of expectations. In March, we saw 34% of all vans sell to online buyers – a new record and a year-on-year increase of 3%.”

BCA and Manheim also both report a slight month-on-month fall in average values. Davock says this softening, the first seen by Manheim in five months is “a good thing” for the market.

He added: “We expect buyer demand to continue to be positive during April, with conversion rates continuing to increase. In April, we are encouraging vendors to focus on the same core factors of reserve pricing, duplication, late plate and heavily-damaged stock. If these are priced accordingly, high conversion rates will no doubt follow.”

Shoreham Vehicle Auctions reported a surge in activity in March as buyers, both online and on-site, sought the right stock. It has seen the used LCV stock snapped up in the twice-monthly LCV auctions, resulting in price stability.

This is despite there being plenty of stock around, especially large panel vans up to 3.5-tonnes, although buyers are remaining selective, due to the variety of spec on offer.

The higher-quality used stock has seen online buyers across the UK using Shoreham’s online sales portal. It reports particular interest in small vans from the buoyant SME sector.

The strength of the building industry is reflected in the demand for ex-utility units at Shoreham. Tipper vehicles continue to attract significant attention, while Luton vans with tail-lifts have been highly sought after from buyers in the building and delivery sectors.

Tim Spencer, commercial vehicle sales manager at Shoreham, said: “Demand for new vans in March has driven retail buyers to seek more vehicles – in large numbers – to fill their forecourts, which we expect to continue. The small market is also stronger, thanks to the models offering the right balance between affordability and payload storage.”

Steve Botfield, CAP Red Book senior editor, commercial vehicles and motorcycles, said overall sales volumes increased by 51% in March, with ample stock available. 

He commented: “It’s often said of March that it comes in like a lion and goes out like a lamb when referring to the weather but it seems the used LCV market also got off to a roaring start in March, according to our research. 

“We had our fair share of bad weather, particularly during the first part of the month, but it didn’t seem to put off hardy LCV buyers who were out in droves at the auctions we attended and clearly on a mission to buy up stock. 

“Month-on-month we recorded a 1.5% increase in the number of auction entries, the average age of vehicles increased by one month to 61 months and the average recorded mileage decreased from 74,126 in February to 73,587. Without exception, all of our LCV pricing team who regularly attend auctions reported that, overall, the condition of stock was among the best they had seen.”

The March used market has seen volumes sold at auction hit their highest level for a year, according to Andy Picton, chief commercial vehicle editor at Glass’s, although it reports a lower increase than rival Cap HPI. The 14.4% increase last month represented an 8.4% year-on-year uplift. 

Just over 70% of those vehicles were sold first time, although that is down from 76.5% in March 2016, according to Glass’s. 

It also reports that the average age of stock offered fell by 3.8 months during March while mileage was down by 7,032. The increase in volumes at auction is reflected in the decrease of average sales price paid, which fell by 0.5% on February levels, but remains 8.4% above March 2016. 

Picton said: “Interestingly, and for the first time, auctions are seeing stronger prices paid for stock that has been offered more than once – typically 2% more.” 

Over the past month, demand has remained strongest for stock in the two-to-six-year-old bracket with sales of two-to-four-year-old vehicles rising 27.5% while those between four and six years old have risen 16.1%. 

At the same time, sales of 0-24-month-old stock has dropped more than 28% as buyers baulk at the sky-high reserves placed against this age of vehicle and, in part, offers on new and pre-registered vehicles which have made this age of auction stock look less attractive.

Picton added: “Overall, footfall and clickfall has gathered momentum with better specified and lower mileage units receiving the lion’s share of the interest. The duplicate stock mainly on offer through the 3.5-tonne large panel sector continues to come under greatest downward pressure.

“Anything unusual in this sector continues to gain attention, however; the best prices are achieved for stock that can be put straight back on the road.” 

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