Used light commercial vehicle market is in good shape, says Manheim

Story: COLIN DAWSON

Car-derived vans continue to prove popular at auction in July, with values increasing by £50 compared with June

The UK used market for vans is still is buoyant despite the ravages of recession, according to Manheim, the world’s largest automotive auction business.

Figures from the company’s latest market analysis show that while the average value of vans dropped by £220 (or 5%) compared with June 2012 prices, the average resale price of vans increased by £124 (3.4%) when compared to the corresponding period in 2011. Month-on-month sold volume variance figures showed July to be the 11^th negative month in a row, which suggests that while used vans are now scarcer owing to the post-recessional drop in the new van market registrations, demand is tracking this reduction in supply.

James Davis, director of commercial vehicles at Manheim Remarketing, told Business Vans: “We need to treat this apparent fall in used van values carefully, as the poor weather, distraction of the Olympics and the usual seasonal summertime lull has no doubt held back retail sales. The July statistics show that the most significant fall in values were among larger vans (panel vans over 3.0 tonnes) and 4x4s, however both segments have seen an influx of older, higher-mileage vehicles come on the market since last year.”

A more detailed look at the month-on-month trends shows car-derived vans continue to prove popular at auction, with values increasing by £50 compared with June. While this increase in price can be explained partly by the drop in age and mileage of stock, this major segment of the LCV market remains robust.

Small panel van values softened marginally in July, in line with seasonal expectations, with a small reduction in selling price of only £28 (or just over 0.5%), while average vehicle age at sale has reduced by four months.

Year-on-year, Manheim’s July market report shows that the used-LCV market remains buoyant overall. Car-derived van values are up £154, despite being two months older; smaller panel vans have also increased their value by £101, despite being three months older and having over 6,000 more miles on the clock compared with the average vehicle sold at auction last year.

Davis said: “The small panel van segment has continued to be been very popular with SMEs and is often cited as a good barometer of business confidence. In times of uncertainty and austerity, savvy businesses are more likely to see the value in buying a well-maintained ‘workhorse’ as opposed to the cost of a brand new vehicle. There is no doubt that vehicles are being run longer in this sector by first-life operators so any headline analysis must consider age and mileage profile.”

Large panel vans (over 3.0 tonnes) values have reduced marginally, by £43 over the year, despite their average age increasing by three months and their odometer readings increasing by 15,000 miles. July set a new mileage record in this segment of 108,238 miles – the highest seen since the Manheim Monthly Market Analysis report was first published in 2006.

Large panel van secondhand values in July reduced marginally compared with June

Davis commented: “It’s well worth pointing out that this is the true workhorse van segment on UK roads and continues to be popular at auction. Sure, the headline value of large panel vans may have decreased marginally, but remember, these vans are typically several months older and displaying much higher mileage, looking at the year-on-year trend.”

In the period July 2011-July 2012, 4x4s decreased in 7% (£522), reflecting their increased age profile (11 months higher) and mileage (10,700 higher). As witnessed in recent years, values move seasonally, mirroring their car cousins, so this segment is likely to enjoy a resurgence in quarter four 2012 and on into quarter one 2013.

Davis said: “Damaged and duplicate models are still an issue in the major van segments. With dealers preferring not to tie up precious cash flow without an order, or to fill a hole on their pitch, conversion rates on this product have softened in line with seasonality. Dealer sentiment would indicate that they expect the summertime retail lull to continue through until September, when historically the market rallies.”

New vehicles are also in demand by business van users. Overall sales of all new commercial vehicles during July increased 8.1% compared with July 2011. New van registrations stood at 18,913 units in July, an increase of 10.2% against July 2011, although year-to-date sales are down by 7.8% on 2011.

Society of Manufacturers & Traders chief executive Paul Everitt told Business Vans: “The commercial vehicle market received a welcome boost in July, rising 8.1% in the month, fuelled by strong van registrations.”

There were variations in sales between van weights. July registrations of small vans (up to 2 tonnes) stood at 3,197, a 26.8% increase on July 2011. The 2.0-2.5 tonne sector saw a slight drop in registrations at 2,420, a 0.5% decrease on July 2011. More large vans (2.5-3.5 tonnes) were sold compared with July 2011, with sales standing at 10,992, a 6.8% increase.

Pick-up sales in July increased by 38.9% to 1,929, but 4×4 sales fell by 29.4% compared with July 2011, to 375.