How did the used van market fare this past year and what can we expect in 2018? Tim Cattlin gauges opinions from those on the ground.
As we approach the end of another year of high levels of, now stabilising, new van registrations, it’s time to ask whether the used market performed well and as expected.
The auction houses certainly think so. Here’s the view of BCA’s LCV operations director Duncan Ward: “Both professional buyers and end users have been bidding confidently across a range of makes, models and configurations this year with lots of competition for LCVs that are in ready-to-retail condition. Values for the best examples will outstrip price guide expectations by a considerable margin.”
James Davis, director of commercial vehicles at Manheim, adds: “2017 has followed the pattern of the last two years with volume de-fleets in Q1 and Q4. This year we enjoyed record Q1 volumes.
“Summertime seasonality was definitely observed in terms of softening values; however, [sales] conversions didn’t noticeably dip as vendors moved to the market.”
Andy Brown, MD of CD Auction Group, concurs: “We expected strong demand and, in general, this has come to pass. The volumes and prices have been strong with well-specified vans achieving good prices. The market for one- to three-year-old vans has been very strong this year.”
Vendors also seem to think the year has at least met expectations, although Julian Pullen, UK head of trade sales and purchasing for Van Monster, suggests that apparent performance against the valuation guides could be misleading.
“2017 has been better than expected with auction prices holding up very well, particularly when measured against guides,” he begins. “There are a number of contributing factors including the lower entry numbers, but also two distinct ones, which you can hang your hat on.
“Firstly, the continued increase in coloured and non-standard spec vans in the marketplace. Cap-HPI states that their values are for white [vans] with no extras.
“Secondly, the proliferation of online competitive bidding… already represents a bigger percentage of sales than in the car arena, where the initial uptake for online sales was much earlier.”
Dylan Thomas, auction manager for Hitachi Capital Vehicle Solutions, adds that in 2017 the firm witnessed its largest defleet and sold 37% more auction volume than in 2016. “Demand is exceptionally strong,” he claims.
Valuation guides have also been reflecting on 2017. Andy Picton, chief CV editor at Glass’s, expects the new market in particular to stabilise. “The record registrations of the last few years couldn’t be maintained, and with the uncertainty of Brexit levels were expected to fall,” he says.
Picton suggests there may be a changing dynamic in the used arena.
“The open market continued where 2016 left off, with strong money being paid for the best of the used stock. The early indications we saw during 2016 of a two-tier market split between ‘car-like’ spec and the more basic ‘fleet spec’ has continued to develop, whilst the 4x4 sector has come under increasing downward pressure,” he says.
Cap-HPI’s senior editor of CVs, Steve Botfield, says its sales data indicates that 2017 has been thriving: “Our research data shows an increase of 8% in sold vehicles from January to August 2017, when compared to the previous year. Comparing our research data against LCV registration history for the four largest vehicle sectors, only the large van sector in 2017 has seen a reduction in used volume (-1%) when compared to the previous year.”
Given the massive rise in new registrations over the past few years, many close to the industry expected the auction halls to be flooded with de-fleeted vehicles leading to a serious over-supply situation and a consequential freefall in values, with the used market being unable to absorb the vehicles on offer. This, however, doesn’t appear to have happened. Auction entries have reportedly eased over the year and in some cases stock shortages have been reported, keeping both prices achieved and first-time conversion rates high for the vendors.
Speculation is rife that customer contracts on existing vehicles are being extended, or that vendors are utilising other routes to market to control the level of vehicles seen at auction.
Glass’s Picton sees credibility in both these suggestions: