The Gavel - August 2022
Wholesale market opinion from our resident car and LCV auction experts, Andy Conde and Stuart Peak.
Andy Conde - cars
I’m delighted to report a much-needed increase in activity across the wholesale auction network these past few weeks, and it’s no coincidence that this coincides with our return to physical auctions across most of our sites.
While the majority of buyers are still preferring the freedoms that come with bidding online via Simulcast (and I predict this will be the norm going forwards), those that are choosing to attend the sales in person are relishing the chance to touch and hear the vehicles once again. Seeing the car in person is particularly important for those older, higher mileage vehicles, and customers also tell us they are grateful to be able to return to their old stomping grounds and see familiar faces.
Seeing people in person again gives us the opportunity to converse and learn more about what’s happening on the ground, and some of my dealer friends tell me that retail demand is also on the rise. Clearly the cost-of-living crisis is going to have an impact on retail for some time, but nevertheless it’s encouraging that many dealers can still move cars off their forecourts in these times.
This positivity is reflected in our auction conversion rates, which are increasing week on week, particularly on first-time entries and vehicles that have seen multiple sales.
Another factor driving this performance is that CAP values have remained stable. Businesses need confidence, and without big fluctuations in values our buyers can bid in the knowledge that the asset they are buying won’t decrease in value in a week’s time.
I also need to commend our vendors who have played a major role in the upturn. I have spoken many times in these monthly updates that too often a bid isn’t accepted on a vehicle, only for it to achieve much less in a future sale. Well, it seems our vendors are heeding my advice and are allowing vehicles to find their own values, giving our auctioneers the authority to sell at a figure that’s maybe less than what they initially wanted, but giving buyers the confidence that they can win vehicles for a price that’s fair for everyone.
August is historically a quiet month in the motor auction business, but this year has a different feel about it. Stock levels are low, and getting lower by the week, but conversion rates are the highest I can recall this time of year. The number of buyers attending auctions at the moment is as high as we’d expect to see in the crazy months of January and February, and with no major influx of vehicles on the horizon, demand is sure to remain for the rest of the summer.
Stuart Peak - LCVs
What better way to start this month’s update than to report on the successful reopening of three physical commercial vehicle sales with Shepshed, Washington, and a new sale on Thursday nights at Colchester. Whilst it is still early days, initial signs have been excellent, and it has been great to welcome buyers back to the auction lanes again. Arguably, we have done this in what would is historically one of the toughest months of the year for selling vehicles, but we like a challenge, and I am a firm believer that there is no time like the present.
So far, in just a handful of events at these sites, we have welcomed over 300 physical buyers back into the lanes, not bad considering we are in the peak holiday season! I was at the re-launch sale in Colchester two weeks ago and there was a fantastic buzz around the place. It felt like the old days again with bids flying in thick and fast from both hall and Simulcast buyers. Even a few car buyers had a go, which was great to see.
The positivity that I mentioned in last month’s update has certainly continued throughout July. We recorded our strongest set of figures in three months with our new and exciting blended LCV sales calendar that maximizes both in lane and Simulcast-only selling.
The key wholesale market indicators (which are also updated every week on Cox Automotive’s Data Dashboard) demonstrated positivity with an increase in the total sold volumes of +17%, first-time time conversions improving by around +6% with three out of four vans selling first time, and the average selling price increasing up to £9,805.
There have been some notable movements in guide values again going into August which should continue to help drive the market and demand also. 4x4 product has perhaps seen the largest movements with some models reducing by over 4%. This comes as no surprise as demand for some late and low mileage pickups has been weak over the last few months with high fuel costs and everyone seemingly watching their spending.
Chassis product has been selling very well over the last month with dropsides, lutons and tippers in demand at the right price. Minibus stock is still performing well, and we continue to see some eye watering prices being paid for wheelchair accessible vehicles with the right spec. Sometimes even the specialist converters themselves are having a go!
To summarise, July has been very positive from a market health perspective which should set us in good stead heading into August.
