The Gavel - 30th May
Andy Conde - Cars
The past few months have been somewhat turbulent in the auction arena with a fall in buyer demand but an increase in stock supply. This ultimately means a fall in auction conversion rates and prices.
We are seeing many vehicles re-entered into auction multiple times because vendors have refused the first bid, eventually taking considerably less in the third or fourth sale. We are now going to see a further drop in CAP prices of around 3% from May to June - this will be the biggest reduction since 2009.
We know we are in uncertain political times and we have seen the sales of new cars drop dramatically.
Or have they? My view is that figures of new cars over the past few years have been fudged somewhat by the pressure put on dealer groups by manufacturers, which has seen hundreds of vehicles pre-registered to enable targets to be hit. Consumers are reluctant to part with their cash or finance a new car until the Brexit situation has been sorted out.
The auctions however cannot be relied on to make the dealers profit. Everyone is competing for the same deal, and the danger is that over-paying for a part-ex in the hope of the auction bailing you out is just not going to happen in the current climate.
The quality of the auction representative is priceless when the job is tough, meaning the skill in being pro-active on the rostrum makes all the difference. The gap between grade 1 and 2 and some grade 3 vehicles is widening from the grades 4 and 5, which have almost become unsellable. It is vital that every vehicle should have a V5, some form of service history and, if possible, a current MOT to have a chance at achieving a good price.
My mantra is that the first bid is the best bid, and 99 times out of 100 this is the case.
Looking to the future
So, how do I see the coming months? Once all the political uncertainty reaches a conclusion hopefully everything will settle down, the number of vehicles coming for sale will ease and the demand, especially from the car supermarkets will still be there. Gradually we will see an improvement across the board, but we may still have a few bumpy weeks ahead of us before this happens.
There is no better time for consumers to buy a used, or in fact new car. Once the confidence is back, the footfall will increase but we need to hold firm, don’t panic and get the money in the bank wherever possible.
Matthew Davock - Commercial Vehicles
As May comes to an end, the LCV market remains very unpredictable with typical seasonal factors coming into play.
As expected with bank holiday periods we have seen a softening of our first-time conversion measures. However, reports suggest retail demand was generally weak across the board and many buyers are reporting the slowest May period for some time.
Overall, Manheim’s LCV arrivals have increased 12% compared to April and we continue to see our average mileage, age and damage increase (age - 63 months, mileage - 79,000 miles).
Getting the most out of the market
We have noticed a decrease in physical footfall at our actions, but online attendances have remained strong as buyers observe both prices and stock levels. Our digital auction programme, including Buy Now, continues to add true value to both our vendors and buyers, with 42% of all stock sold online.
Our first-time conversion is tracking at 74% and our overall agility remains a clear part of our 2019 strategy. When an asset isn’t sold, we continue to work hard to re-enter the vehicle as quickly as possible and a vendor’s flexibility plays a crucial part of this process.
Damaged and higher mileage units remain a very important focus of ours as these generally remain the biggest challenge when the overall retail market remains soft.
Looking ahead
With June not being affected by bank holidays, I feel we will see normal conditions return to the CV marketplace, and this will in turn kick-start buyer demand once more. Our online programme will remain strong and we hope to see physical footfall return to early 2019 levels.
