Manheim Shepshed

Supercharged three tier van market emerges in 2020

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Manheim January data reveals differences between Euro 6, Euro 5 and the significant impact of mileage.

Manheim, the UK’s number one CV remarketing business, reported January increases in average selling price, CAP performance and first-time conversions. Auction volumes were also up 34% versus December and up 7% versus January 2019. This performance was a reflection of recent new vendor wins and an increasingly diverse section of high quality van stock.

  • January saw 8 out of 10 vans selling first time. 80.8%, up 2.3% versus December and up 2.8% versus January 2018
  • January van CAP guide performance reached its strongest level in two years and rallied up 2.63% versus December 2019
  • January saw up to 25% more active buyers participate inlane and online versus January 2019. 3,088 buyers, up 22% versus January 2018 with 44% joining via online channels
  • SMMT data shows best January new van market in over a decade.
  • Mileage having the biggest impact on buyer appetite and sale performance
  • First ever Cox Automotive 2019 new van forecast just 1,778 vehicles or 0.49% short of SMMT.

February CV wholesale data
The new van market continues to show signs of robust growth. Following 2019’s third best ever new van registration volume, January’s monthly SMMT data showed a 5.9% increase in new van registrations versus January 2019. 

In line with seasonal de-fleet and replacement programmes, Manheim saw a January increase in daily rental and flexi-rent units enter its auction lanes; many of these being Euro 6. With an average age of 24 months and mileage of 32,992, their average selling price was £11,674. More than half of these vans (56%) sold to online buyers.

The strongest sales performances in terms of CAP guide prices was Euro 5. In January they averaged 101.66% of the guide. With an average age of 46 months and mileage of 74,771, these vans achieved an average selling price of £6,540. In contrast to the Euro 6 cousins, Euro 5 vans sold in January were more likely to be won in person, with 58% going to a physical inlane buyer.  

Matthew Davock, director of commercial vehicles at Manheim, said: “During January, we have seen exceptionally strong buyer appetite from franchise as well as independent van dealers. With some OEM lead times of up to 12 weeks, focus on used stock and any 2019 pre-registered volumes has been key in the franchise world.” 

Davock added: “We are seeing a three-tier market emerging in the van sector and this is likely to set the tone for the rest of 2020. The first tier is Euro 6. De-fleet volumes will continue to steadily grow, with good quality stock and Clean Air Zone compliant engines in strong demand. Euro 6 performs equally well in both digital and physical remarketing channels. The second tier, sub 100,000 mile pre Euro 6 vans, are still in high demand and enjoying good performance against guide prices. However, the third tier, pre-Euro 6 vans with more than 100,000 miles, are proving more of a challenge to secure a buyer. Analysis shows, if reserved without market scrutiny, only 40% sell first time.”

Davock concludes: “We’ve seen from the rostrum how the buyers’ appetite has changed throughout the past 12 months. Refurbishment and repair costs continue to rise and, along with the challenges of profit erosion, the number of buyers willing to take a risk on a higher mileage vehicle is certainly on the decline. In my opinion, it is mileage rather than damage which is having the biggest impact on appetite and performance.”
Manheim’s parent, Cox Automotive, is also observing the accuracy of its first annual new van registration forecast. Published in the 2019 Cox Automotive Insight Report, their upper forecast was 364,000 new van registrations. SMMT data closed the year at 365,778 – a difference of just 1,778 vehicles or 0.49% from the Cox Automotive forecast.   

James Davis, director of customer strategy and insight at Cox Automotive, commented: “We ended 2019 with the UK’s third best ever new van registration result. Despite economic and legislative pressures this is ultimately testament to the role of commercial vehicles to the UK service sector and economy. Manheim’s January performance suggests the market has a lot to be positive about in 2020. Of course we need to keep an eye on external factors such as clean air zone rollout, zero emission streets and business confidence as we negotiate trade deals. The early cycling of Euro 5 replacements in the leasing sector will diminish. We are forecasting 2020 to be stronger still than 2019. This contrasts with the forecast of the SMMT which, in December 2019, forecast the 2020 van registrations down 5.2%.”

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