Used Market Place Trade Talk
The month of February provided yet more excellent trading conditions at the used markets.
A continued lack of direct-from-fleet stock continues, certainly in the LCV markets, although there is intelligence that suggests the car market will start to fill up with stock now.
As reported in previous months, much of the flow of used car stock is coming from the daily rental sector, with up to 2 year old cars now starting to come back to the market.
But some strong retail demand is being reported from many dealers that we speak to at auction, with February being better than January.
So the thinking is that there are enough buyers out there to soak up any spikes in supply into the car markets, thus maintaining prices albeit subject to the usual small monthly drops in values.
The LCV market remains strong too, with plenty of demand for the fleet stock. Our sales at the moment are all 100% of stock sold, so nothing left unsold. This is of course aided by rostrum management, with some deals done after the sale but, nonetheless, we are in a great position in being able to offer fresh stock at every sale.
There is much talk at the moment about the flood of former Citylink vans on the markets, some of which are seen above at a local auction. Despite these being Transit 350 long wheelbase high roof models, they are not affecting the sales of our client stock, which are predominantly white T350 long and medium wheelbase models. It is rumoured that there are some 1700 Citylink vans on the market at the moment, which is undoubtedly causing a problem for the lessor. The problem is partly the colour, but mostly down to the fact that they are Royal Mail type vans, i.e. they have been on intensive courier type work.
The trade know that the vans have a multitude of different drivers, are often used 24/7, with extensive use of the gearbox and clutch! As such they are not desirable, only unless they are very, VERY cheap!
We have noticed recently that the ‘niche’ car market is starting to over flow. This sector was created by the launch of the Nissan Qashqai back in 2007, which along with the Juke, has proved a huge success for Nissan. Because it created its own niche market sector, the Qashqai has enjoyed extremely strong RV’s since day one and, even today the model still commands exceptional prices (when compared to its new list price).
However, as more Manufacturers join the fray and introduce their own ‘niche products’ into this sector, the RV premium will disappear. It is simply supply and demand and, when even the likes of Audi and BMW join in, you know that the product is no longer ‘niche’. Therefore the premium values will disappear.
Another item occurred this month in the Car Industry, insignificant in itself but, with huge implications.
Toyota has announced very quietly that it is to allow some of its 5,500 patents relating to the production of its hydrogen fuel celled car, seen below, to be released for other Manufacturers to ‘share’.
This does, on the face of it seem crazy, for a Manufacturer to release patents to the competition; however there is method in their madness. Toyota know that, for this technology to succeed, especially in the face of ever falling fossil fuel prices, it requires efforts from most of the world’s major Manufacturers to produce their own products. Only then will there become an internationally established network of fuel cell production, recharging and fuelling points, to allow the vehicles to be used by mainstream customers.
For years now, the Industry has been talking about how fuel cells will be the fuel of the future; we could have just witnessed, very quietly, the birth of that dream!
On a more mundane note, the number of accident damaged vehicles being handled by us has raised significantly this month and, really since Christmas. This is not entirely unexpected of course, with the winter weather that most areas of the country have suffered of late. But our salvage dealer says that volumes have this month reached unprecedented levels, with flood and snow damage being the main culprits.
But it is not just weather related, the salvage industry have seen a rise in the number of extremely badly damaged vehicles caused by simply speeding and losing control, suggesting that driving standards are deteriorating.
I have often said that any new driver should be shown around a typical salvage yard, to let them know that they really are not invincible!
A few images follow, taken in a scrap dealers yard this month; they are really shocking, particularly the black BMW which crashed at over 120mph.
Plant and equipment sales this month were booming, with massive demand for anything direct from fleets.
This Unimog seen below was sold at Shoreham Auctions this month for nearly £20,000, not bad for a 33 year old vehicle!!
We also attended a classic car sale at South West vehicle Auctions in the month, with some truly amazing prices being paid.
The MGB seen below was actually one of the more reasonably priced cars, given that it was a very original and rust free example.
It sold for just shy of £7000, which was still at the top end of its estimated price.
But the Mini Cooper seen below had certainly seen better days, with some serious rust forming in the main sub frames’ and around the boot floor. The car can be seen below just beyond the immaculate Escort RS Turbo (which itself sold for £9500), and sold for an incredible £10600!
There does seem to be plenty of money around to spend on classic cars, but I would be concerned that prices are bubbling up too high once again.
To summarise, February has proven to be an excellent trading month for LCV’s and, to a slightly lesser extent cars, but overall results have been good. We see this trend continuing right through to Easter when demand will lessen slightly. But good trading conditions will persist after Easter, until the summer recess.