New market activity
Figures released by the National Caravan Council (NCC) show the volume of motorcaravans registered between January and April this year increased 4.7% compared to 2018, at 5,633 units. This small growth is in line with feedback that Glass’s has received from dealers, who intimated sales have been at a similar level to last year.
July is already upon us, meaning 2019 market season is nearing the final straight. Much like this time last year, the majority of dealers and manufacturers will be relieved when the season ends. For the bulk of Glass’s editorial team contacts, business is less turbulent than 2018. For the 2019 season, most dealers decreased their stock orders. This reduced repeating risk of significant amounts of unsold stock remaining on forecourts at the end of the season.
The general view held by dealers, that Glass’s spoke to was that demand and sales are level with 2018. Common amongst dealers is the concern of inconsistency in sales activity. Familiar patterns are, above average sales one week, followed by almost nothing going out of the door the next. This makes planning difficult, especially with the 2020 season model previews starting and decisions on stock orders for the forthcoming season needed.
Similar sales volumes to 2018 may seem discouraging, but stable activity will give dealers some comfort in light of recent economic and political uncertainty. However, high discounting is prevalent, with as much as £8k off some models becoming the norm where discounting appears essential to deliver sales. Dealers report the high numbers of unsold 2018 stock is finally starting to dwindle, which will be a relief for many freeing funding and valuable space on forecourts, for more desirable stock.
As expected, Brexit is still a huge talking point. Not everyone we have spoken to in recent months takes the view that Brexit has affected the new and used markets. However, a resolution to Brexit is what everyone would like to see. Some dealers however, believe that sales will increase dramatically, as soon as the government agrees a deal with the EU to resolve Brexit. Of course, the recent delay to the withdrawal date was frustrating
Finance penetration is reportedly at similar level to last year. One dealer we spoke to noted that ‘Even with the current great rates, there has been no surge in demand. This is probably down to the economic uncertainty’.
Manufacturers appear to see room for growth in sales with some reportedly bringing production forward. This of course puts pressure on dealers to commit to order stock early, especially during uncertain times. However, it will be interesting to see if dealers share the sentiment about the 2020 season and order higher numbers than 2019. One dealers we recently spoke to summed up perfectly how the majority feel going into the 2020 season – ‘positive hinged with caution’.
There are definitely interesting times ahead, but most will be hoping for more stability as the 2019 new market nears to a close.
Used market activity
By all accounts, it feels like it is one-step forward and two steps back for the used market. Going into 2019, the used market appeared to be stable. Sales and demand were buoyant due to the rising costs of new models, and a surge in first time buyers wanting to ‘staycation’. However, the constant threat of low stock availability was lurking, and it seems to be responsible for almost grinding the market to a halt. The demand is still very much there, but sales are reportedly down for the majority of dealers. It has long been a fact that the pool of available used units is a small one, and after a positive few years, demand has completely outweighed the supply.
The biggest worry is that there does not seem to be a solution; after all, manufacturers cannot make used motorcaravans. Unit production was not huge following the economic crash of ten years ago, and owners generally hold onto their motor caravans if it is up to 8 years old.
The two used price brackets preferred most by consumers are £18-25,000 (entry level) and £30-40,000. Anything available over £40,000 is looked at less favourably as the price is too close to new model pricing territory. Condition remains key and units worth the entry-level price are going to struggle being in a ready to retail condition with significant refurbishment costs needed to bring them up to standard. There certainly is not an influx of units readily available in the used market. As the scenario continues, potential customers could begin looking at the new market again, especially if cost new prices do not inflate too dramatically, and dealers continue to offer competitive discounts.
In the July edition of Glass’s Caravan data values have moved down 1%. For subscribers of the Glass’s caravan app, please ensure that you regularly update the current editions to receive the latest datasets. Since the July 2017 edition, we have added over 1000 previously unvalued models to our database.