The Gavel - December 2020
Wholesale market opinion from our resident car and LCV auction experts, Andy Conde and Stuart Peak.
Andy Conde - Cars
As we emerge from a second national lockdown and I write my last update of the year, I wish I could end on a more upbeat note. However, November was a month heavily affected by the introduction of more national restrictions and this unsurprisingly had a big impact on the market.
Thankfully, the majority of our customers were able to continue trading thanks to investment in digital retailing and the introduction of click-and-collect procedures, but many others decided to close their doors to weather the storm.
Amazingly, all things considered we still sold a considerable number of vehicles throughout the month, but buyers were understandably more cautious and were being much pickier about what they bought. Retail-ready stock was in highest demand while anything that might need to sit in the workshop for a few weeks was harder to shift.
Conversion rates were understandably down, but so were the number of vehicles coming in to be sold so that just about balanced things out.
I was pleased to see that the number of buyers logging in to our online auctions remained healthy which is a testament to how Simulcast has enabled us to continue business as normal throughout the year. It seems buyers were keen to keep an eye on proceedings, even if they weren’t necessarily looking for stock.
Vendors on the other hand were very keen to sell, but only at a price they were happy with rather than panic selling. Caution has been the name of the game as vendors hang on for better bids once the market re-opened. We saw a big uplift after the end of the first lockdown in the early summer, so we’ll undoubtedly see something similar this time round.
There were already signs of this happening with buyer activity picking up considerably towards the end of the November. It seems buyers were keen to start stocking up again as lockdown came to an end but for now it’s hard to predict if we’ll see quite the same boom this time round. Auction volumes aren’t as constrained as they were back in the summer so competition for stock is unlikely to be as fierce. Still the appetite for stock has clearly returned and the bids will follow.
Stuart Peak - LCVs
I’m pleased to say that we have once again witnessed a fantastic LCV marketplace in November. With a second lockdown affecting the entirety of the month, it was always going to be difficult to predict how the market would cope, but it’s incredible to see how consistent it has been.
The trend of strong performances has continued with nine out of ten vans selling first time, days to sell coming in at just eight (a 38% reduction YOY), 104% of CAP achieved on average, and a 39% average price increase compared to the same period last year.
If you asked me back in May to predict how the next six months would go it would have been impossible to say, but now looking back we can see it’s been a record-breaking period.
November saw the second strongest month on record for values achieved on Euro 6 vans, representing 43% if all vans sold and an average selling price of £12,416. Our overall average selling price fell by £431 versus October, although a slight increase in average age and mileage would help explain that. As a whole, November was our second strongest month on record after October’s incredible performance.
With the recent news of the collapse of Debenhams and Arcadia Group, it does look as though some of the high street giants’ days are coming to an end. As tragic as that is, this will only help to further drive both the new and used LCV market further as the general public continue to adapt and adjust to shopping online and home deliveries.
With the impending January sales and while a tiered system remains throughout the country, I predict that utilisation of rental vans will remain high throughout the early parts of next year. This could cause a shortage of rental units in the wholesale market.
However, the word on the street from a number of sources is that deliveries of new vans have been moved forward several weeks by a number of manufacturers, likely as a way of beating any potential import tariffs as we enter the new year. If this is the case, then I’d expect this to help drive de-fleet volumes throughout Q1 2021.Now the second national lockdown has come to an end, early feedback from the trade is that retail activity has remained consistent which is a trend I hope to see continue into the new year. It’s also great news that Manheim auction centres have been able to re-open their doors safely for viewings by appointment prior to the sale. Numerous buyers have already booked viewing slots at our LCV centres and I see no sign of this slowing down over the next few weeks as we see out the end of the year.