A Buoyant Trade in August
This August must rank as one of the best summer holiday trading periods at auction that we can remember, with pretty much everything being offered selling and for strong money. In many cases, clean stock was making well over the Book guide price.
The really weird thing is that, talking to the traders after the sale, they all admitted that the retail forecourts were still very quiet indeed, whilst people take their holidays, so quite why the stock was selling so quickly and for so much money remains a bit of a mystery!
One likely explanation is the continued lack of stock about, with some normally 300 van sales reduced to just over a 100 units. When supply becomes so limited, the trade tends to ‘stock up’ for fear of ever-increasing prices. Long may it last!!
Economy Stable – For Now
The overall economy remains fairly stable throughout these summer months but, with the constant media attention on BREXIT and the relative failure of those negotiations, many economists are predicting some tough times ahead.
Some believe that the UK economy faces some difficult trading in the short to medium term and certainly whilst BREXIT talks continue with no particular outcome. Indeed investment in, and by UK companies continues to recede, with foreign investment now looking much more attractive.
Consumer spending in the UK continues unabated, however much of this spending is on consumable items and, even that driven by a marked increase in credit derived purchases. Investment in property has dropped significantly, with the housing market now suffering its own recession. Will the vehicle markets follow? Time will tell but, certainly with real term wages dropping and inflation likely to increase, this could all produce a similar stalling in the vehicle markets.
I guess the point of all this supposition is that the economy remains stable for the time being, but unless a good BREXIT result comes along soon, spending will dry up and the used vehicle markets will become affected, with prices dropping.
ULEV (Trade) Education
Whilst much of the media attention is focussed on the Manufacturers, all jumping on the ‘ban the diesel/petrol cars by 2020’ bandwagon, the used markets remain much less certain about how quickly ULEV’s will be bought by the public.
Indeed it remains the case that today, traders and dealers at auction are simply not buying the hybrid or pure electric stock on the used markets, with little interest being shown.
To their absolute credit, Shoreham Vehicle Auctions have undertaken a series of seminars, aimed at trade buyers, to persuade them that ULEV’s are the future.
Having already held a session for car buyers Shoreham will shortly hold a similar exercise for LCV buyers. As Alex Wright, MD at Shoreham commented to me the other day, “if a dealer is trying to sell LCV’s into the (London) congestion zone, what is not to like about the eNV200 and Kangoo electric vans? It will not be long before they have a price premium over diesel and petrol”!!
Certainly Alex is right in respect of the low emission zones because, if as is widely expected many more Councils adopt a congestion area charging for non-hybrid or electric vehicles, suddenly they will become popular!
New Model Update
Not too much to report this month, although many concept models have been launched at the Frankfurt Motor Show. And this year’s show was certainly all about electric and hybrid vehicle launches, with Mini’s all electric car announced in a blaze of glory.
There can be no doubt that the electric car revolution is underway, with most Manufacturers eager to announce their own versions, not happy to just offer hybrids.
Battery technology is improving all of the time too, with this latest Mini offering a 250 mile range, similar to the next Nissan Leaf. The Tesla Model X is due on stage very soon, but with a hefty £60k plus price tag this one will be beyond most people’s means. This is all good news for the new car market and will stimulate growth in EV sales, but until prices reach a more normal level it will be the domain of fleet and company car users, rather than private sector sales.
And this could all leave the used markets in a bit of turmoil, as far as existing used electric vehicles are concerned. With the new Leaf covering 250 miles, who will want to buy a used one that covers just 100 miles? This issue is set to run and run, with some major convincing of the buying public and selling trade to be achieved in the short term.
Mini Countryman PHEV
This is the car that is most likely to get my money invested in it. With a 1.5 petrol engine, 26 mile electric range for urban use, 134 MPG and a reasonable list price, this surely has to be the way forward in the short term. Demand for this new car is said to be astonishing, partly I suspect because the driving experience is pure Mini, not your typical Hybrid.
Kia also used the Frankfurt Show to launch their next mass-market offering, the new Stonic.
Aimed squarely at the Nissan Juke, this crossover is likely to become an extremely popular member of the Kia line up, possibly doing what the 2010 Sportage did for them years ago.
It could introduce a whole new younger audience to the Kia brand, and with it the 7 year 100,000 mile warranty. That is quite an attractive package.
There was nothing particularly new in the LCV world to announce and, in that statement lies an uncomfortable truth.
The CV market is falling woefully behind that of the, more innovative new car markets, with their hybrid and EV offerings. Manufacturers will argue there is little appetite for such alternative LCV’s but, I would argue the opposite. With congestion charging and clean air zones all becoming a reality in 2019, there is not a lot of time left to bring new, innovative product to the CV markets. Someone has to start and soon!!