Election Finally Over!
Following the, perhaps unsurprising election result, it seems fairly likely that the used vehicle markets and the economy as a whole, will now simply stumble along as before.
Whilst the markets remained fairly stable in the lead up to the election, most traders would agree that business was not buoyant, merely stable. It was hoped that with a clear Tory mandate and large majority, this would stimulate demand. That coupled with a remaining lack of supply, prices would strengthen as we head to the summer break.
But of course the stock market responded badly to the election result, immediately losing several points and the pound dropped even further against the dollar and euro.
Thus we are left with a mediocre market where demand remains fairly poor. Trading at auction has also remained cautious as a result, with no significant improvements in prices. We are hopeful that September should prove to be a good strong month for trading this year, given the lack of stimulation since Easter.
With some, hopefully better news regarding a softer BREXIT, that could be enough to stimulate demand in the used markets, once everyone is back from holiday!
What’s Selling?
With enough supply in a somewhat depressed market, the last month has seen some vans making very strong money. But the trade are being extremely selective on what they pay strong money, with vehicle condition and service history being absolutely key to a successful sale.
But anything ‘sporty’ in the van world with a good history and no damage will make strong money, especially new models such as the Ford Courier and Connect, which are regularly making several hundred pound over Book currently.
Sticking with the sporty theme, Transit Custom and Vauxhall Vivaro derivatives with alloys, aircon and any other bolt ons are also doing very well in today’s market. With good history and no damage, these vans will always find eager buyers.
We have also seen an increase recently in the fortunes of the smaller Transit vans, such as the 280 seen here at South Western Vehicle Auctions.
Such vans remain the builder’s choice, having a ‘square load area’ for plasterboard sheets etc., so anything clean with good history will make strong money.
In the car world, it is more of the same really, with anything sporty making good money. Luxury cars are also doing well currently, making Book money.
There remains quite a lot of stock around though, so condition and service history is key to a good sale.
Any damage on car stock is causing either low prices, or a no sale.
What’s Not Selling?
Transit 350 long wheelbase is not as popular as it once was, with most examples selling today for less than Book money, even if it is clean.
It could possibly be too strong pricing in Book but, more likely the demand for long and high vans is seasonal, with this time of year always being quite poor.
It is the same story for most long and high stock, with those that are selling coming with the all-important full history and no damage.
Tippers are also struggling currently, with the strong prices being paid earlier on in the year now disappeared. Again it could be down to the time of year and a lack of Government sponsored infrastructure work. It is affecting all sizes of tipper too, including the big 8×4 models such as this clean Mercedes Actros example, which struggled to make £45000 at a recent truck sale. Under different market conditions, such a truck would have flown out the door, easily surpassing Book values.
It is affecting all sizes of tipper too, including the big 8×4 models such as this clean Mercedes Actros example, which struggled to make £45000 at a recent truck sale. Under different market conditions, such a truck would have flown out the door, easily surpassing Book values.
We have even seen this with Transit 350 Tippers and Dropsides which, with good history are making Book, but little more.
Again, late last year these clean examples were making at least £1000 over Book! All of this makes residual value forecasting extremely difficult indeed, so fickle is the market.
Electric Vehicles! (Not Selling)
And sadly, at the moment, electric vehicles are not really finding any kind of audience at market currently. We witnessed 3 2-year-old electric vans at a sale this month, none of which even got a bid. There was absolutely no interest in them at all, from either the floor or the net, and it was a good buoyant sale with some big buyers there.
The vehicles in question were as follows:
2015/15 Nissan eNV200 Acenta Rapid, 14000 miles
CAP Average £14200, no interest at an anticipated sale of £9500.
Monitor is today quoting £8425 on this van.
2015/15 Nissan eNV200 Techna Rapid, 12000 miles
CAP Average £15400, no interest at an anticipated sale of £9500.
Monitor puts this van at £8625 today.
2015/15 Renault Kangoo ML20ZE, 4000 miles
CAP Average £11600, no interest at an anticipated sale of £5000.
Monitor quotes £6800 on this van today.
An interesting survey was undertaken by the CAP hpi last month, amongst dealers regarding the diesel debate. One of the questions asked was “will you be investing in AFV/EV vehicles to replace the diesel cars”? 79% said no, they would not buy into the new technology yet.
The AFV and EV industry has a way to go in convincing the USED MARKETS about these vehicles; it is all well and good selling them new into fleets, where company car taxation policy favours them over diesel stock, but unless there is a used marketplace in which to sell them once fleets have finished their contracts, the whole life costs simply will not stack up and some leasing organisations could be sat on some hefty RV losses!
From the Trade Press
Some snippets from the various trade press magazines this month are of interest:
Ominous Portents for Motor Finance – the Financial Conduct Authority has announced a wide ranging investigation starting in September this year, into the UK motor finance market. This could spell bad news for the markets, as point of sale finance has no doubt stimulated demand since the recession. With a potential of some mis-selling in some areas, a ‘PPI type’ scandal could follow. Furthermore, the FCA are investigating PCP finance and, in particular the residual values being set by the finance companies. Again any interruption in the provision of PCP deals could seriously impact both the new and used markets going forward.
Mixed News for Manufacturing – Now that article 50 for BREXIT has been triggered, there are some mixed messages reaching the car industry, not least of all some American owned brands starting to produce some negativity on the subject. In contrast, the Japanese brands are all sounding positive, with no immediate plans to exit the UK after BREXIT. Overall the UK remains a vital market for the EU, with some 70% of the new car parc being imported from Europe. Equally, European vehicle and component groups have substantial investments in the UK car industry, so will need some protection. The probability of a satisfactory outcome of the BREXIT talks remain high, with no doubt some standoff’s to come during those negotiations.
Amazon Vehicles – following a very successful trial in the US, Amazon UK are poised to introduce their on line vehicle sales tool ‘soon’. Whilst this new tool does not sell vehicles outright, it does enable users to specify and price their purchase, enabling comparisons with each manufacturer’s offering. It can only be a matter of time before Amazon venture into the full sales process, all of which will combine to threaten the very existence of the traditional vehicle dealer network.
New Vehicle Update
New Vauxhall Corsa
To bring their best seller up to the same design and specification of Astra and Insignia, the new Vauxhall Corsa is due for release later this year. Initial shots show a heavily revised car which appears bigger than the outgoing model.
With the new tech now provided for Astra included, this new car is sure to be a hit for Vauxhall. Expect residual values to be much the same as for the outgoing car.
Mercedes Econic 4×2 Low Entry Cab
Mercedes have announced yet another low entry cab truck, for urban articulated application.
Together with their general low entry Econic truck range, Mercedes will no doubt get ahead of the crowd once it becomes clear that many major towns and cities across Europe will start to ban traditional trucks, unless they are ‘pedestrian and cyclist friendly’.
This could ultimately have a big impact on used values, with older style high cab trucks becoming little more than scrap value, if these new proposals reach legislation. The road haulage bodies have, unsurprisingly branded them as ridiculous and, virtually overnight rendering many truck fleets worthless.