June's Light Commercial Vehicle Editorial

Andy Picton

15 Jun 2018, Editorial

LCV Marketplace

Sales of new light commercial vehicles rose by 2.4% in May as 27,639 new light commercial vehicles hit British roads.

Following five months of up and down performance during 2018, YTD registrations are down by -1.4% on May 2017. Nevertheless, 145,514 units registered to the end of May means that demand is still a third higher than 5 years ago, and on track to reach forecasts for the year.

Vans between 2.0-2.5t GVW experienced a 21.5% increase in registrations, whilst vehicles between 2.5-3.5t GVW rose by a more modest 2.0%. Demand for vans below 2.0t GVW fell by 21%, whilst 4x4s in the pickup sector fell for the second month in a row, this time by 2.6%.

Ford continue to reflect their dominance in the new market, with the Transit Custom in first place registering 4,237 units, Transit in second (2,686 units), Transit Connect fourth (1,425 units) and the Ranger eighth (1,111 units). Unsurprisingly, Ford also dominate the YTD placings, with the same models in 1st, 2nd, 4th and 6th respectively. The Transit Custom has sold 21,805 units during the first five months of 2018, more than double that of the third placed Transporter (9,974 units).

Following another buoyant month of used vehicle trading both in hall and online, buyer demand during May remained strong for the best stock across all sectors. Volumes sold at auction increased by over 1,500 units during the month – the first increase in four months - whilst volumes sold is 12.7% higher than at the same point 12 months ago.

As a result, the average price of stock sold at auction during May increased by 1.4% over April, recording the fifth consecutive monthly increase. Prices now sit an incredible £1,000 higher than at the end of May 2017.

First time conversion rates fell by 2.7% to 83.3% (71.3% - May 2017) whilst their average age fell by a month to 62 months.

A lack of quality stock remains an issue, with many buyers looking for vehicles that can be placed straight on their forecourt with a minimum of preparation. Nevertheless, both professional buyers and end users continue to bid confidently across all sectors and ages with the best stock exchanging hands for premium prices.

The Combo, Caddy, Berlingo and Connect have been regulars at auction over the last month, with most examples selling without difficulty. Those offered in a metallic colour or with extras such as A/C also sold without issue.

Plenty of ex-rental stock is available at auction with 14 and 15 plate Vivaro and Trafic commonplace. The Ford Transit Custom is a regular sight as well, with 5-year old high mileage examples still attracting plenty of attention. The in-demand Custom Limited, which has been a must-have van since launch is showing signs that its previously super strong values are now coming under a little downward pressure.

A lack of quality in the large van sector continues to be an issue and as a result, has seen demand soar for the nicest 3.5t stock. Sprinter, Transit – both current and previous generation - and PSA have sold strongly over the month with rare examples of FWD Transit 290 and nice condition L1H1 Relay/Boxer commanding a lot of attention. Harder worked and higher mileage stock continues to underperform with values regularly below expectations.

Sales of 4x4 pick-ups increased slightly during May with average sales prices down versus April. However, when priced sensibly, those in good condition continue to sell without too many issues. Rangers are finding life hard currently, with all but Wildtrak automatics struggling to gain market acceptance. Previous generation Navara Tekna continues to gain plenty of attention, but is starting to look its age whilst the iconic Land Rover Defender 90 continues to amaze, with recent examples in XS specification performing strongly.

HCV Marketplace

The HCV Market as a whole is slow at present. Every dealer in the country is searching for the best stock at the best price. Unfortunately, with little top quality stock available, most is commanding a premium.

The recent demise of a prominent daily rental company has seen the trade react positively to the release of much-needed later plate stock into the used market; buyers are paying strong money for this stock.

At the lighter end of the HCV market, demand is increasing for 12-15t GVW rigids with many operators now looking to replace their 7.5t GVW stock. Following the licence changes in 2013, the haulage industry has held on to vehicles for as long as possible; it seems now to have reached a tipping point. With a growing number of drivers no longer automatically qualified to drive 7.5t GVW vehicles and hauliers having to pay for CPC training and O Licences, many operators have decided to move up the weights to maximise payloads. At the same time, other operators have decided to move down the scale to 3.5t light commercial vehicles.

Similarly, at the heavier weights, with few clean and tidy examples available, buyers drive prices ever upwards as demand for the nicest stock with the lowest miles outstrips supply. The flexibility of curtainsiders means that they are currently more desirable than box vans on the open market, as operators look to diversify. Tippers remain in short supply, with any sleeper cabs combined with distribution bodies particularly popular.

High powered three and four axle rigids with big cabs are performing well, especially Euro VI construction vehicles for operation in and around London requiring Low Emission Zone (LEZ) compliance. The knock-on effect to this is the reduction in demand for Euro V and older stock.

The only growth sector for new registrations during quarter 1 2018 was tractor units. The majority of these registrations being distribution units replacing older vehicles. This has caused issues with the oversupply of tractor units that are more than 3 years old with prices weakening. Newer Euro VI stock continues to find homes without too much difficulty as operators seek to future proof as much as possible.

About the author

Andy Picton

Andy PictonChief Commercial Vehicle Editor

Having worked previously for Barclays Asset Finance and LeasePlan in the commercial vehicle sector, Andy joined Glass’s in 2002 as part of the Commercial Vehicle team working closely with manufacturers, leasing and insurance companies, traders, dealers and auction houses. He was promoted to Chief Commercial Vehicle Editor in 2016 and manages our industry-leading team of valuation experts. He loves football, music and obviously commercial vehicles.