WHAT’S THAT COMING OVER THE HILL?

As European economies continue to falter, it is nigh on certain that before too long the big marques will look to the UK to absorb a higher proportion of their total production. Accordingly, with their networks already offering high discounts, it’s a safe bet that incentives on new vehicles are set to increase. Therefore, as it is always necessary to maintain a realistic gap between the price of a discounted new and late year LCV, the amount of damage this inflicts upon RVs will be determined by just how much additional new stock is parachuted into the UK.

Many pundits believe that over the coming months, due to the manufacturer’s ambitious sales aspirations, used LCVs prices are destined to fall. If prices for late year LCV stock were to be adversely affected by aggressive marketing on new, there would inevitably be a knock-on effect to earlier years with the worry as to what the size of such reductions might be. If things were to hot up over the summer due to such reckless tactics on new, some fear that used stock could be hit by a price meltdown. Before making such an assessment it should be acknowledged that at the start of this year, LCV prices stood at an all-time high. Accordingly, regardless of the scale of any slippage, it was always odds-on that they would fall back. At that point, the magnitude will largely be dictated by the underlying health of the wider economy and the size of discounts and incentives being offered on new vans and off-roaders. Thankfully, with the UK’s economy looking set to perform reasonably well over the next 18 months and coupled with long lead-times on new LCVs, these two positives alone should help mitigate some of the negatives.

Although, it is unlikely that we will see a uniform uplift across all commercial vehicles ranging up to 44 tonnes, healthy gains will be posted by most. A big uplift can confidently be predicted for 3.5 tonne panel vans as there is still a chronic shortage of quality used stock at this weight. This is due to the sectors of the economy that such vans serve having been especially hard hit during the economic crash and were then slow to recover. Consequently, with so few 3.5 tonners having been sold new over those dark days, there is a dearth of the right used stock to meet the current high demand. Regardless of the details, what is clear is that LCV volumes will grow in 2015 and given a following wind, an all-time record tally might be posted. This alone points to just how muddled things have become as despite of the wider UK recovery, the idea of records being set for both registrations of new and used LCVs prices is undoubtedly paradoxical.

With new panel van product having already been launched (or soon to debut), the LCV market between 2.6 and 3.0 tonnes will become especially cutthroat as manufacturers battle it out for supremacy. With the launch of VW’s T6 on the horizon, there will be stiff competition to both win and hold the high ground within this medium panel van arena. Initially, it will be MB’s New Vito going toe-to-toe with Ford’s already established Transit Custom; although both are excellent vans that can stand on their own merit, with the stakes being so high no quarter will be given. Here, the sub-strategy might well be to mop-up every possible sale prior to their arch rival Volkswagen getting to market with what is billed to be a fitting replacement to their iconic T5. In fairness, if this all seems somewhat ungentlemanly, it was precisely what preceded the launch of Ford’s Custom. At that time, the competition clocked up heaps of extra sales on price alone which some interpreted to be little more than spoiling tactics.

Meanwhile at the sharp end, dealers believe that while business prospects remain favourable, customer demand has undoubtedly slipped from last year’s highs. Of course, this does not mean that things won’t improve later in the year yet the mood within trade circles has certainly become more cautious. Despite the market currently being in good form, there are challenges of monstrous proportions confronting both the UK economy and wider political scene that jeopardise dealer’s prospects over the medium term.

MARKET TREND

REGISTRATIONS

In January, commercial vehicle registrations grew by more than 23%. SMMT statistics confirmed that although sales of lightweights were nearly 22% higher than for this same month last year, with an improvement above 38%, heavyweights were the top performers. Uplifts in registrations of this magnitude for chassis above 7.5 tonnes, although long anticipated, had proven elusive over the past 12 months. Hopefully, with sales of trucks, tippers and tractor units getting off to such a brisk start, 2015 will prove to be the year of recovery for heavyweights. For lightweights, should registrations grow at anything close to what was achieved in January be maintained, then this year would post an all-time record tally.

USED LIGHTWEIGHTS

As a result of the volume of used stock growing, auction sales are starting earlier in order to finish at a sensible time. Thankfully, the level of online business has remained steady with cyber buyers seemingly after LCVs of all ages and types. Fiestas and Corsavans continue to attract keen interest while the far greater availability of Bippers and Nemos has seen market sentiment flag. Astra Clubs are currently enjoying better fortunes as a result of their numbers having fallen yet, Sportive and Sportive SE vans offered with high miles struggle against Guide. Previous model Combo is still well regarded and consistently sells to Guide Trade with the SE being particularly well thought of. However, plenty of service history will be needed if late year lots are to achieve Guide Trade.

Current Doblo/Combo is seen as a desirable van although the prices paid are not overly impressive with those for higher mileage examples falling away to Guide Disposal. More encouragingly, the previous Doblo SX retains a loyal following and typically sells to Guide Trade. Despite there being plenty of Berlingo/Partner vans on offer, they are highly regarded by both retail and trade buyers. This ensures that the returns from the best Enterprise/Professional examples and L2 crew vans equate closely to Guide. Conversely, demand for late year Kangoos remains fragile whilst older models continue to lose ground to the competition and can at best hope to snare an end-user buyer.

When offered with low mileage and plenty of service history, 1.9TDI versions of previous generation Caddy sell to Guide with ease. Within VW’s current light van line-up, the 102PS engine is preferred to the 75PS and although BMT examples attract most interest, they receive only a small monetary premium over the standard engine technology.

USED 4x4s

As a fair proportion of the UK escaped any major disruption due to harsh weather, this has partly contributed to the currently lacklustre level of demand for LCVs with all-wheel-drive. As we approach the end of the off-road season, and most of what’s on offer are top end models boasting car-like specification, only the very best examples sell to Guide. At auction, it is still Navaras and L200s that account for the highest number of entries and with big discounts available on new pick-ups, this has led to price weakness. With Ranger, D-Max and Amarok being in such short supply, thanks to their popularity, they are assured of commanding big money.

The less common pick-up types such as Nissan’s Cabstar and 3.5 tonne offerings from Fuso and Isuzu rarely fail to impress. However, to fetch the strong returns they’re capable of, they must be presented in a clean and tidy state which, in view of the site work they’ve often been on, is not that common. Another branch of this market that is seldom acknowledged as a success story is the extended cab pick-up. Here, thanks to the additional internal capacity provided Extra-cab and Super-cab arrangements in both 4×2 & 4×4 configurations are in high demand.

Few, quality Defenders are to be seen at auction and although this has bolstered prices it leaves buyers frustrated and having to turn to competitor product. Land Rover dealers often comment that there are never enough used examples to restock the forecourt with County and XS models being especially difficult to source. Workhorse examples of Defender 90 and 110 are also thin on the ground with all tidy examples attracting plenty of interest at prices that pepper Guide.

USED PANEL VANS

At auction, most mid-year panel vans sell to Guide Trade at the first time of asking; and with high demand from retail and trade buyers, the best crewcab types continue to sell strongly. However, due to the big discounts available on new and some unrealistic vendor reserves, late year examples often struggle to sell.

As a result of the number of Expert and Dispatch vans on offer having fallen back, this has helped those that do materialise to command their full market worth. Late year models have been performing strongly with prices for the best low mileage 1.6HDi 90bhp Enterprise or Professional L1H1 vans running into Guide. Similarly, Vivaros/Trafics/Primastar vans had been receiving mixed trade sentiment yet lately, as availability tightened, their fortunes turned the corner. Demand for early year, price-range 82/100bhp vans has firmed with buyers searching out all such stock provided it is ready to be put to work.

With the number being de-fleeted fast diminishing Transit T260s and T280s remain market favourites with each late year van selling consistently to Guide Trade. Where any Limited or Trend models surface they gain hefty price uplifts over the base model. Turning to Ford’s latest generation product, the Transit Custom is now to be seen in greater numbers at auction and the positive market sentiment it enjoys delivers healthy returns that equate to Guide values.

Transporters with high bhp and a high specification often sell at prices which are not far short of Top Guide while the 84ps, and to an increasing degree the 102ps, are proving less desirable. With a widening step in price between workhorse types and all-singing-and-dancing 140ps/180ps models, it is apparent that retail buyers crave LCVs with plenty of power and creature comforts. Here, the caveat is that the basic rules of supply and demand must be adhered to as any oversupply of top end models will not only hit their market worth but also cascade down to lowly specified stable mates.

For another month, demand for nearly-new large panel vans has massively outstripped supply which has seen quality used stock commanding strong money. At early year, what’s on offer is generally in poor condition, yet provided its roadworthy and can be put straight back to work, sells without difficulty. While all long and high 3.5 tonners ranging from older Daily to current Sprinter find new homes with ease, Guide Trade is rarely paid unless presentation is good.

As seen over the past few months, latest-shape Masters, Movanos and NV400s are proving popular with trade buyers who consider them a good substitute when a Transit can’t be found. Likewise, Relay/Ducato and Boxer models have seen their prices firm as a consequence of the ongoing stock shortage at 3.5 tonne. It is not only the nicest low mileage vans from these quarters that do the business but also those with higher mileage, if the price is right. Both van and chassis variants of last generation Transit continue to enjoy huge demand, consistently selling strongly against Guide. In particular, derivatives are particularly desirable with late year dropsiders, tippers and lutons all ringing the bell. Elsewhere, regardless of the badge on the front, whether a single or double cab, all clean and tidy 3.5 tonne chassis types are in vogue.

USED TRUCKS

As if it wasn’t difficult enough to source good used stock, more worryingly, the volume of what will be on offer is predicted to shrink further still. The only encouraging aspect to this is that price levels are likely to firm in line with growing demand from both domestic and export buyers. This might well lead to dealers, and their customers having to accept lesser chassis at the same money or be forced to pay significantly more for the quality stock they desire. Hopefully, towards the close of 2015, courtesy of improved registrations, the availability of late year chassis will ease, so with any luck supply and demand will then be better balanced.

For rigid chassis at all weights, little has changed with the market’s appetite for the best chassis holding their prices firm. At 7.5 tonnes, although the overall supply is plentiful, most of the chassis on offer bear too many battle scars and fall short of the standard retail customers want. More encouragingly, at the higher weights, there is no shortage of willing takers for each serviceable rigid chassis between 18 to 26 tonnes. Although there is again a high number of scruffy lots doing the rounds at auction, when tidy boxes, curtainsiders, tippers and platforms are offered, the competition between trade buyers becomes fierce. At the top of trade buyer’s most wanted lists sit multi-drive rigids on either three or four axles. These rare beasts outperform the others and when a tipper and grab combination, or good hookloader, comes under the hammer, prices go skyward.

Scania and M-B tractor units presented in a clean and tidy fashion continue to attract the most attention and highest prices. Market sentiment for DAF and Volvo prime-movers falls just short of these front runners with MAN and Iveco residing one rung lower in the pecking order. However, with product from each of these marques being well respected, the availability of any late year stock creates a buzz. With, exporters reported to be looking to buy Euro-5 models, as some countries are now insisting on late year, lower mileage models. As a consequence this means that the competition to secure used stock, from what is already a very restricted pool of tractor units, will be ramped-up.