The Gavel - 10th May
Cars,
Andy Conde
In parallel to another tricky month for the new car market with registrations down 4.1%, we have seen a significant downturn in the wholesale market. Although the two aren’t necessarily linked, it’s a sign of the times with political and economic uncertainty everywhere you look.
Auction volumes have increased in April which is a good sign that the confidence in our auctioneers remains, however, regrettably we are in a period where vendors are disposing of more and more of their low quality stock whilst still demanding top quality prices.
As such, buyer demand has decreased and we have seen the biggest CAP reduction from April to May since 2015. My view is that for some models this still isn’t enough and we will see further decreases come June. So far the reduction in values of petrol and diesel has been very similar.
It’s not all bad news! We are starting to see the values of Hybrids and EVs gradually increase as confidence grows and this has to be the way forward. As more used AFVs enter the market this trajectory will increase.
In a difficult market I have no doubt that the first bid is often the best bid. Vendors not taking our advice are often re-entering a vehicle a week later and taking less money for it.
Looking to the future
I do not see any major improvement as we head towards the summer, however, the lower stock levels will help. Brexit has now become more of an excuse than a reason for the hardening of the markets and so working closer with our customers and doing the right thing has to be the answer.
As we look ahead it’s certainly not all doom and gloom. We have seen some great new business wins, our buyer base remains strong and we have a quality team of auctioneers who are not simply bid takers in a strong market place but bid makers when the job is tough. This can make the difference between a good sale and not so good sale.
Commercial Vehicles,
Matthew Davock
The CV market remained largely positive through the traditionally quiet month of April, but we did see a shortage of stock, partly driven by long lead-times for new vans.
The trend for higher age and mileage vehicles continued as more ex-fleet stock entered the market, but the forces of supply and demand meant that the average selling price rose slightly month-on-month. As always, vehicle specification and condition were the key factors in valuing individual vehicles.
April is generally a challenging month in the CV retail market, and customer feedback suggests that the sunny weather conditions over Easter impacted retail sales and activity in what felt like an extended break. That said, our customers are reporting pockets of positivity in their results for the month.
Getting the most out of the market
Our LCV Online shop windows continue to perform well, and buyers have shown strong appetite throughout the holiday period to buy stock. This channel is currently representing double-digit growth in transactions compared to last year.
This proactive approach between our physical and digital platforms meant during April we reduced our customers stock holdings from 15.4 in April 2018, to 14.3 in April 2019.
Vendors would be wise to adopt digital auction events into their disposal strategy sooner rather than later to ensure their stock is reaching the largest possible audience.
Looking ahead
I expect May to follow a very similar pattern and feel. In my opinion stock levels will increase during May; therefore, it will be crucial that stock is assessed and priced in line with the current market factors and the general vehicle condition. The blend between applying key focus on every unit offered and utilising each sales channel will help and support the overall performance and days to sell.
