Andy Conde on Manheim rostrum

The Gavel - September 2021

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Wholesale market opinion from our resident car and LCV auction experts, Andy Conde and Stuart Peak.

Andy Conde - cars

Andy Conde on Manheim Rostrum

Another month has passed, and once again we have seen more wholesale price rises. And the question we are still all asking is how sustainable is this? Another 3.7% increase from August into September is frankly unbelievable, but it now seems that all levels of stock are at a premium as supply continues to reduce week on week.

Price appears to be irrelevant to many buyers currently as they know they have retail customers desperate for new vehicles and prepared to pay premium prices for them. While this balance remains and supply remains low, this trend will only continue.

We’ve all heard much about the component shortages and material price rises that is making it almost impossible to build new vehicles at the scale required. The prices of nearly new used stock will continue to soar for at least the remainder of this year and, in my view, well into 2022.

I sit in many review meetings with both buyers and vendors every month and the message is the same from everyone – they need more stock. Vendors selling through closed networks would do well to embrace the open market while buyers are so eager.

I reported last month that physical auctions have returned to Manheim and I’m pleased to see attendances at these auctions continue to rise. Lower quality stock is benefitting from physical auctions more than anything else as buyers can assess the cars as they come through the lanes and the atmosphere in a live auction hall naturally creates more competition.

Despite the summer holidays now being behind us and autumn knocking at the door – historically a busy time for new vehicle sales – I don’t expect to see an influx of stock. Vehicle supply pressures will continue to lead to many dealers to hold onto to their part exchanges, but the part-exs traded in against those used cars should begin to hit our auction lanes as we head into October.

Stuart Peak - LCVs

Stuart Peak on Manheim rostrum

So, we somehow find ourselves at the start of September reflecting on a summer that never really happened. Luckily, the LCV market certainly didn’t cool while people tried to find the sun wherever it appeared.

As expected, we saw some seasonality play out with fewer buyers participating at the start of August and then picking up towards the end. First time conversions dropped by 5.3% versus July, which we expected as many buyers also reported a dip in retail activity.

However, I am delighted to report that for the fourth time this year we have broken our record for average selling price in a single month. And by some way - up £332 compared to our previous record (set in June) to £10,554. Looking at the stock profile, the average age of stock sold in August compared to July was just 0.4 months younger and the mileage was 25 miles higher on average; small margins in isolation but resulting in a large increase of £365 on average versus July.

We also saw record values achieved for Euro 6 stock in August, up to £13,722, is an increase of £296 compared to July despite the stock being very slightly older and with slightly higher mileage. In total, 60% of all vans sold at our sales ticked the Euro 6 box. Average values of Euro 5 stock also increased reaching record heights of £6,076.

Looking ahead, I am predicting that the shortage of used LCVs in the wholesale marketplace will only push prices higher as the year progresses, and this won’t be the last time our average selling price record is broken this year. A bit like the Indian summer that we are in for this week, I feel that the LCV market is going to be on fire!

Overall, the market looks healthy, with many of our buyers reporting a surge in enquiries and sales towards the end of August, and encouraging early signs at our sales in September with increased buyer participation. As lead times on new vans continue to rise, and with whispers of orders for new vans getting cancelled, I predict many hotly contested battles at our sales this month – we’re ready!

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