“There is an element of contract extension going on, but I also believe there is plenty of stock being held in readiness, which, as this feeds through to the open market, will hopefully see prices ease.
“We are also seeing more vendor e-auctions starting up, which is keeping volumes at auction at a sensible level.”
Van Monster’s Pullen elaborates on the theory that vendors are seeking new and direct routes to market: “We have recently launched our own Van Monster E Auction facility, which has been very successful. Vans are sold remotely via a bidding platform with a suite of pictures available on each van and a no-quibble sale cancellation agreement if it is not as described. Other vendors will be doing the same as the technology makes it easier to reach your market.”
Manheim’s James Davis takes a broader view: “Certain vendors are enjoying higher/lower volume de-fleets from their van operator clients depending on van replacement cycles. I don’t believe contract extensions are the main driver, certainly not formal extensions.”
He adds: “The make-up of the market sees three distinct categories: daily rental/flexi rent, which are younger but with varied mileage profiles, tending to travel higher average annual mileages; the second category is the contract hire lease van, which is typically three to five years old; the third – own-account fleets, including utilities, local authorities and councils with product up to and over 10 years of age.
“This blended mix offers something for all budgets and ensures any one year’s new van registrations doesn’t hit the market at one point in time.”
BCA’s Ward says his company has seen little sign of lower entry numbers, but that values remain robust .
“BCA has seen record levels of entries in 2017, a result of business retention and acquisition in the important corporate sector,” he says. “A number of auction centres around the group have posted record sale volumes. We’ve just opened expanded facilities in Manchester and plan to go twice a week with LCVs in the north west due to the demand.”
With almost unprecedented, price-led marketing from manufacturers keen to raise or retain market share, new or pre-registered vans are being advertised with extremely competitive cash prices or lease rentals. This is putting pressure on those involved in remarketing ‘late-plate’ used LCVs.
CD Auction’s Brown recognises this: “This is very much linked to short-cycle PCP [personal contract purchase] volumes.”
Picton concurs: “The PCP/PCH [personal contract hire] route to market is growing in popularity. This is known by the trade, which means they are less likely to offer ‘guide’ money for any late-year stock offered at auction.”
Davis adds: “I would suggest it is only pre-registered stock that could impact nearly-new used demand. Only long-term volume discounting to gain significant market share can lead to a softening of used values.”
Davis offers his own observation on the recent ‘scrappage’ schemes: “I don’t believe the initiatives will make a needle-moving impact on retail sales. Despite the previous scheme being a Government-backed initiative, ‘scrappage’ vans this time, as last time, will be taken off the road permanently rather than sold back into the open market by manufacturers.”
Dylan Thomas, auction manager, Hitachi Capital Vehicle Solutions: “We foresee demand and supply will remain in balance. There will be peaks and troughs of supply in the overall market as seen in previous years.”
Andy Picton, chief CV editor, Glass’s: “I believe volumes at auction will inevitably have to rise and values will soften for all but the very best examples.”
Andy Brown, MD of CD Auction Group: “Any further weakening of the sterling/euro exchange rate and worries around Brexit could have a negative effect.”
James Davis, director of CVs, Manheim: “I suspect 2018 will be another buoyant year. I don’t see oversupply as an issue in the next two years. Government is committing billions to infrastructure – road, rail; all need CVs.” Davis says only a serious downturn in the economic cycle could destabilise new and used markets.