Never before in my living memory and 25 years in this industry have so many factors lined up to influence the fortunes of new and used vans. 

In this series of blogs I consider the latest acronyms to hit our industry ULEZ, CAZ, WLTP and RFL to name a few. One thing is for sure, there are more questions than answers and it’s going to be a fun few years! 
 
And today’s topic? How will WLTP affect the LCV sector?

The impact that WLTP and new tax introductions such as VED will have on sales of new diesels across the commercial sector is yet to be seen. 

Coming 12 months after its introduction into the car market, the biggest question over WLTP for LCVs is how the Government plans to calculate CO2 relative to % of GVM. Until we have this detail we are unable to predict just to what extent vehicle capacity will play a factor (i.e. empty, part loaded or at full payload), and for minibuses in particular, who rely on full capacity, the impact could be huge. 

Another question which remains to be answered before implementation comes into full force, is whether OEM base vans will be tested, or whether each individual configuration upon purchase will require testing too. For OEMs, testing each and every derivative and spec level could bring headaches, and with individual certificates of conformity, how will Government databases know what was fitted originally in a van? 

With potential production delays and therefore sales at risk, it is hoped that OEMs (with cross badge LCV collaborations, common platforms and engines) will work together and motor through the testing regimes well ahead of the deadline.

Anticipating challenges ahead, some OEMs are already withdrawing engine options and/or extending lead times significantly, with one OEM reportedly withdrawing its small capacity diesel engine and re-instating the “old” and more WLTP friendly 1.6 it replaced.

The WLTP also comes in the midst of a continuing media backlash against diesels, and it will be interesting to see how petrol and alternative fuel LCVs perform in the tests. Research from Emissions Analytics recently revealed that the latest Euro 6d-Temp diesel car models (using real world portable tailpipe testing kit) emits, on average, 71% less particulates that petrol equivalents, and when looking at Nitrogen Oxide specifically, the average emissions from the cleanest diesels were 48mg/km (compared to 36mg/km for new petrol vehicles). In addition, recent industry reports stated 95% of hybrid cars don’t match their stated MPG figure.
 
In my opinion, while WLTP will force manufacturers to address engine efficiencies and the current Government consultations on CO2 banded van VED will add additional costs to the driver, neither are likely to have huge impacts on the desire for, and purchase of, certain LCVs. 

Unlike cars, where downsizing to smaller, more fuel efficient and low emission vehicles is easy and varied, a commercial vehicle is bought purely for its ability to carry a payload and help the owner’s employment. And as the nature of that payload determines the size, shape and GVW, van operators are often unable to swap to petrol or alternative fuelled options, relying on diesel suits their operations. 

Therefore, the additional operating costs which the likes of VED will add will just be another burden to carry for many LCV drivers - a background running cost that will be generally accepted.
 
As such, I believe Euro 6 vans will begin to make more significant premiums as early as Q4 this year; becoming the new norm with Euro 5 purchases softening in 2021 and beyond (considering the age of these vans and their mileage and condition at this point there is minimal financial risk to asset owners).

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James Davis