Focus on Remarketing
TO THE FUTURE LOOKING BACK
Following a challenging period in the LCV remarketing arena, Tim Cattlin looks at 2023 for clues about what’s in store for the year ahead
he cost-of-living crisis, high interest rates combined with changes in the balance of supply and demand for used vans have all made 2023 another year full of twists and turns. But are we seeing the used van market return to stability? Julian Pullen, senior editor commercial vehicles and motorcycles at cap-hpi thinks the signs are there. “Having heard, and used the
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word ‘unprecedented’ way too many times over the last few years, 2023 saw a thankful, if gradual, return towards ‘business as usual’ in the LCV remarketing world. New vehicle supply continued to ease, particularly through the second half of the year, and auctions and dealer forecourts subsequently saw used vehicle stocks bolstered to more reasonable levels.” Adding a caveat to this though, Pullen suggests that product mix and buyer behaviour in 2023 were different to previous years.
“Stock age and mix changed considerably and vehicles available to sell were on average, older, and showing more damage than in previous years.”
Insiders’ outlook for 2024
Julian Pullen cap-hpi: “A day trip down any motorway bears out the fact that vans continue to be the lifeblood of many UK businesses, and with new manufacturers, new models, and better versions of existing BEV examples all coming on stream this year, the new and used van will continue to be a solid contributor to reliable turnover and profit opportunity in the UK automotive industry for many years to come.”
Andy Picton Glass’s: “Demand in the used market will continue in the main for diesel vehicles, with a growing but limited demand for hybrid vans. Values in 2024 should generally remain strong for used Euro 6 stock as further CAZ are introduced. As most manufacturers look to combat the requirements of the ZEV mandate by streamlining their new model offering, certain used models will see an increase in demand and as a result stronger prices paid.”
Matthew Davock Manheim: “We expect to see more volume in the first half of 2024 compared to the same period in 2023 and overall volumes to increase further versus 2023 levels as many of the largest fleets and rental businesses take advantage of the new vehicle supply’s positive factors. We expect to see BEV volumes continue to increase further throughout 2024 and we also expect to see an increase in demand for BEV LCVs as guide values re-align, buyer awareness regarding ranges increases and positive retail demand and asset confidence builds.”
Alex Wright Shoreham: “Used vehicle supply is likely to be restricted again in 2024 as it’s three to four years since the Covid pandemic when new vehicle sales were heavily compromised in early 2020. Businesses will also be tightening their belts even when interest rates continue to fall, with the Bank of England expecting little economic growth in 2024, which will restrict used vehicle demand.”
Geoff Flood Aston Barclay: “The overall health of the used LCV market is likely to be linked to how interest rates perform. If they continue to fall, then this will help fuel growth in the economy, which benefits the smaller businesses that buy used LCVs. It will kickstart the economy and should help keep used LCV prices and demand consistent throughout the year.”
Despite an ageing stock profile, 2024 should see stability return to the auction halls.
He added: “There was also a notable absence of younger low- mileage vehicles around, of the type historically de-fleeted in numbers by hire businesses running vans on their own risk.”
Andy Picton, chief commercial vehicle editor at Glass’s has also seen the auction landscape change. “Registrations have improved
dramatically in 2023, albeit from a low starting point which has allowed most operators to de-fleet into something newer and cleaner, which in turn has increased the pool of used stock. “We’re also now seeing over 75% of all vans sold at auction being Euro 6. There’s a diminishing demand for Euro 5 as ULEZ/CAZ force most operators to Euro 6.”
The auction companies are reporting a strong 2023. With the global component shortages easing, operators were able to refresh their fleets with a consequential rise in auction entries. If demand fails to match supply,
however, there is a danger that prices will weaken but this wasn’t evident overall. Matthew Davock, director of Manheim Commercial Vehicles, Cox Automotive, said: “2023 was another record-breaking year for LCVs at Manheim as our strong market position was reaffirmed. Our new sales program generated fantastic engagement, with a 37% increase in buyer activity compared to 2022, resulting in an average of 216 more active buyers per day. Wholesale auction volumes returned to pre-pandemic levels too – representing a 22% increase in numbers versus 2022.”
With fleets having had to retain their vehicles for longer than anticipated, the change in the age and mileage profile has been substantial. Davock observed that 2023 saw the oldest- ever stock profile seen in the wholesale LCV market sector, giving buyers stock profile challenges they had never witnessed before.
20 WhatVan? January 2024
www.whatvan.co.uk
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