Day 2 at the CV Show – what a fantastic busy day
Day two at the CV Show and we were flat out welcoming our existing customers, greeting new ones and catching up with industry friends. It’s been a great day! Our friends at the BVRLA, which this year share our stand space for the first time, also had a fantastic day meeting and greeting their members.
Without doubt we’ve smashed previous attendance records; seeing over 200 visitors to Manheim’s stand in one day. In discussions it was clear to me many are currently uncertain about the short term future of the van market. Many clearly believe that there will be an imminent downward readjustment to van values, that the market cannot continue in, as I would say, its “supercharged” state. I disagree.
I’ve reported that, compared to 2006, average van values today are 45% higher. That’s £1500 – when our average selling price is nearly £5000.
In that time period we’ve lived through the worst recession in living memory. I remember the CV Show in 2006 and the record number of new vans launched. Last year that record was broken. The strength of the used van market is not a recent phenomenon and I do not believe it is a market that will crash and burn and leave first life financiers and owners high and dry.
Only a recession has the overarching power to do that. The glass ceiling of values has been reached. I said that last year and I genuinely believe values won’t increase. Please don’t mistake the current market sentiment and conditions as signs of impending doom! There are more duplicate product in the auction halls than we’ve ever seen. There is more damaged product and over half of the vans we sold in quarter one were over seven years old. In the ever popular small panel van sector they were over eight years old.Desirable 3 to 5 year old product will always be snapped up by eager buyers, providing it’s in fair condition and not surrounded by significant numbers of duplicate examples. It’s a two tier marketplace of young vs old vans. This will continue for some time to come. SMMT forecasts predict steady growth in van registrations. We’re not far off the new van registration record year of 2007.
I believe that these vans are likely to return to the wholesale market, in increasing volumes, towards the end of the decade. In the meantime I personally believe the used van market is going to enjoy a period of stability where age profiles will begin returning to a pre-recessionary “norm” and the influence of older vans diminishes. There is only one thing that could impact this – the general election. Business confidence is key. What we don’t want to see is a second general election combined with a seasonality affected summer. The market could stall. The commercial reality is that financiers and operators setting residual values should factor in the longer term softening of the market according to increases in supply that will inevitably come towards the end of the decade. I believe values could soften by up to 15%. Based on today’s average values that equates to around £750. In the meantime the discounting activity and market share aspirations of manufacturers will influence the nearly new wholesale van market.
Time will tell and in only 375 sleeps we’ll be back at the 2016 CV Show! Time flies. Anyway, back to the supercharged 2015 show! On day two we beamed in Shotts, Colchester and Washington auctions live and saw buyers using the stand as a base to bid using Simulcast. I love that. I remember when we first beamed a sale into the NEC live in 2005. We sold a handful of vans online that year. Now we sell thousands. Last year over 30% of our vans and 60% of our trucks sold to online buyers. Now we regularly see between 200 and 300 buyers online and attending sales. With our newly launched online timed auction events running in parallel with physical events the popularity of online never ceases to amaze me.Cox Automotive, our parent, is investing billions of dollars in online technology. Our buyers are ultimately driving the development of new channels as they seek more ways to secure the best stock from the best vendors. Vendors have the choice on where to place their stock, I would encourage them not to discount the virtual shop windows, my prediction in the next five years they will become the norm. I am not saying we’ll replace physical auction events; merely that our business is going to see a significant shift towards online routes to market.
Speaking of Cox Automotive another great thing happened today. Sister companies Motors.co.uk and NexrGear Capital have supported CV at the show, just as they did last year. We engaged a new auction buyer today. Then we introduced them to Motors.co.uk. They signed up to classified listings. Then we introduced them to NextGear Capital. They signed up for a stocking plan. Magic. It shows the strength and breadth of our business and underlines the fact that we are the largest automotive services business in the world. I am proud to stand with my customers and colleagues in the NEC, in our auction halls and at other industry events.We’re the UK’s number one CV auction company. We hold more CV sale events than any other. We sell the widest variety, and largest volumes, of vans, trucks and plant. We have the most experienced industry team. We are the most engaged in our industry.
I would again like to thank our buyers, vendors, industry partners, friends and associates (of whom there are many) for making us who we are. I am proud to lead Manheim CV. I am proud to work for the UK’s Number One.
I am excited for the final day of the show, we’re being joined by our new MD Tim Hudson and let me be the first to tell you – he LOVES COMMERCIALS!! Please do come and see us if you haven’t already and “Share The Love”.
