The summer months have been quite literally on fire at the used markets and that is pretty much across the board, cars, vans, trucks and plant. This has been despite the various Government restrictions and lockdowns, most recently of just 6 people meeting in any gathering, indoors or outside. This doesn’t affect the motor trade too much, as retail forecourts can continue to operate as they have been.
Interestingly, demand for used cars at the forecourt has dipped slightly in the early weeks of September, probably due to late holidays being taken ahead of further local lockdowns. Overall though demand is as strong, if not stronger than this time last year so, the used car markets remain in a good place.
Many main dealers are choosing to retain a lot of the part exchange stock for retail, as they try to appeal to a wider audience whilst maintaining margins in the cars. That is important because of the large cross section of buyers at the moment, from those choosing to upgrade their cars, those recently made redundant and having to find their own transport and, even those who refuse to use public transport and so have turned to personal commuting again. All of this is resulting in a lack of volume at auction, creating stronger values across the board.
New car registrations for the period since before lockdown have seen a roughly 41% reduction on this time last year, although orders are now ramping up with the introduction of the ‘70’ plate.
New diesel registrations continue to fall by 15% in the same period, as fleet and private buyers alike opt for the greener solutions in Hybrid and EV’s.
The LCV market remains ‘on fire’, with almost unprecedented prices being paid for ‘direct from fleet’ stock. Talking to the trade in September they said that stock straight from fleet with full documentation is a rarity today, so when it does appear there are plenty of buyers for it. Almost regardless of damage too, so eager are the trade to acquire this highly retailable stock.
We have seen prices continuing to climb over the summer on our client LCV stock, with almost everything selling on the first outing, hardly anything is being left behind. It is the older vans that seem to fare best, as they still represent the best value for money to the trade, who would rather buy two vans for their £10k investment rather than one van; they can earn twice the margin for the same outlay.
Panel vans in particular are really good news at the moment, especially in the long and high variant. This is caused by the boom in online shopping, caused by the Covid19 pandemic. Most online businesses have reported a massive increase in sales and the need for ever larger fleets of delivery vans.
The electric Nissan NV200 vans seen above at a recent sale at Shoreham Vehicle Auctions sold very well, despite being ‘earlier generation’ with limited range. In our experience auction sale prices work out to somewhere between petrol and diesel prices overall.
Conversely, one sector to really suffer throughout this period is minibuses which are becoming harder to shift. The coach industry generally is on its knees, with the survivors now beginning to pick up scraps of work with the return to school.
With the need for social distancing on board, minibuses are just not worth operating, unless it is for the school run. Thus the minibuses in the markets are struggling to find buyers, thankfully like the rest of the sector they are small in volume.
Thus the results for both the car and LCV markets this month are self-evident, amazing results for every vehicle entered. Our rostrum management continues to help stock along too, with our ability to intervene along the way.
The truck market remains relatively strong again this month, but only for the right stock.
There is much more stock about in the heavy sector, as company closures continues to throw back some unwanted trucks. The crucial thing is if the truck is desirable to the buyers and, anything less than Euro 5 generally isn’t unless it is rare or of specialist nature, such as the Mercedes Axor Dropsides that we sold for a client this month. Despite their age, the heavy duty body and loader crane ensured there were more than enough buyers for the trucks, with some very competitive bidding taking the price way in excess of CAP.
This underlines that anything that is desirable is going to sell well but trucks such as fridge boxes, normal box and tailift, and the ubiquitous 6×2 day cab tractor units are going to struggle to sell for reasonable values, such is the lack of demand for them and the volumes now appearing at market.
Plant and equipment markets have settled into a routine now, all being currently online only, everywhere in the country. Prices remain strong as buyers and sellers are getting used to the online process, although we still believe there could be premiums paid once physical sales recommence.
New Model Updates
VW Golf Mark 8
The Golf family continues to grow with the latest introduction of the Mark 8 version of this most popular of models.
Whilst the overall shape of the car has simply evolved from the previous model, under the skin this new Golf has gone completely digital. Sitting on VW Group’s latest platform, this new car can easily take Hybrid and EV applications, as the world moves ever closer to eliminating ICE’s.
The new car will no doubt perform extremely well in the used markets when it arrives there, with residual values expected to exceed those of the equivalent previous models. Indeed we are already now seeing premiums being paid for petrol hybrid cars, with diesel variants whilst still popular, playing second fiddle to the hybrids.
There are a raft of electric vans now released, or due for release over the coming months. Many are from the mainstream manufacturers, such as the new e-Vivaro from PSA group.
With a range of up to 205 miles on the WLTP standard and a maximum payload of 1225kgs, this van is sure to prove very popular with fleets, especially as the lead times are reasonable too, being built on the same production line as the ICE versions.
Fiat are not far behind, having introduced electric versions of their entire LCV range and in all variants too. Mercedes now have their own offering with Sprinter and Vito, alongside the usual product from Nissan, Citroen, Renault, Iveco and Peugeot.
Notable new arrivals are the Maxus E Deliver3 and Deliver9 seen above, both with a very impressive electric range and charge times. Whilst they benefit from Chinese battery technology no doubt the usual use of cheap plastics and flimsy build quality will hold this newcomer back. And doesn’t the Deliver9 look a bit like a Transit?!!
Not to be left behind, electric trucks are now also being offered from the mainstream Manufacturers.
Volvo are pushing ahead with their FE Range electric offering, currently producing a chassis that has a maximum range of up to 200kms.
Whilst this may not be much use to a high mileage haulier, electric trucks must surely now have a role to play for urban use, such as RCV’s (above), local delivery, tankers etc.
Volvo’s new low entry cab would also produce a very desirable, clean urban truck for the future.
Rostrum Management and ‘Profit’
The trade are beginning to have an issue with the exceptionally strong prices they are having to pay for direct from fleet stock and are desperately trying to reduce prices. Many are concerned that the prices being paid at auction are actually higher than the forecourt retail price, leaving much reduced margins. For this reason it has become noticeable that our intervention to get stock on sale at the right time has taken on more significance, with many vehicles then going on to make more money. Thus even when most sales remain ‘on line’ only, rostrum management still plays a key role in achieving the very best residual values.
XBG FLEET REMARKETING LIMITED