Weekly vans update with Matthew Davock - 5th October 2015
The week where conversion rates hit an all year high and vendor de-fleet volumes continued to fall.
Seriously, where has September gone? When reflecting on the month as a whole, I would make the following two statements “consistently high conversion rates” and “increased performance to the guide prices for majority of segments”.
We’re currently in a marketplace where demand is outstripping supply. We’re seeing very healthy buyer sale day registrations, especially online, against a backdrop of 50% less volume. This “perfect storm” is driving an overall increase in most performance measures.
The question I keep getting asked by our buyers is “When will we see an increase in volume?”
Well seasonally there is a time-lag between new plate change and used de-fleet. In car world it is up to 30 days. In vans it is up to 90 days. This is because the majority of vans need to visit at least one subsequent supplier to ‘kit out’ the van for its purpose. 2015 is different. In 2006 we saw a new record for new model launches, in 2015 this record was broken. In 2006 we saw a record used van market in terms of conversions and average selling prices, in 2015 new records will be set in the used van market. The common threads are there, manufacturer lead times are extending and the economy is strengthening.
Daily rental fleets are preparing themselves for the Christmas home delivery boom period. An increasing number of large distribution fleets are bringing in new vans and retaining the old vans until the post seasonal lull in January. In my opinion we will not see an increase in van volume until early November and quarter one 2016 will mirror quarter one 2015.
As in August, September followed a similar pattern. Historically buyers will play the negative card on retail activity. However, with strong relationships with many of the country’s top buyers the grass is not as green as first appears. Many buyers are reporting a similar monthly pattern; the first 2 weeks being very successful and the last 2 weeks having slow retail enquiries. October sees the launch of the all-new 2015 Consumer Rights Act, consolidating a number of old acts, and extending more protection to the consumer. Speaking to our buyers, many are concerned that this will put even more pressure on their business margins and processes.
Clean condition and low mileage remains key; mileages below 70k have shown very strong premiums. After auctioneering many sales this week it is extremely noticeable that vans with high specification are still the driving force around the buyers bidding.
Air conditioning and satellite navigation seem to be the real bid pullers. When combined with metallic paint these lots are number one in terms of priority.
To conclude we have witnessed very strong performances across the country. Vendors who reserve heavily damaged stock correctly will be rewarded with high conversion rates and buyer loyalty during quarter 4. Volume will come and when it does it’ll be a buyers’ market again. No cause for largescale price concern, just that van reserves must be set according to the peer group activity.
Friday sees us holding the UK’s first ever remote CV auction event at a vendor’s head office. Using our award winning Mobile Auction Unit we’ll be welcoming physical and online buyers to an auction at the Trowbridge HQ of Hitachi Capital Commercial Vehicles. With over 50 fresh and rare spec vans this promises to be a fantastic event. It showcases one of six new online sales channels launched by Manheim in the last 12 months.
Thank you again for your much valued business and continued support. Tune in next week to see how we’ve performed. Until then your feedback in valued and I am on hand to answer any questions you have and don’t forget the most important thing, keep ‘Sharing the CV Love’.