Andy Conde on Manheim rostrum

The Gavel - September 2022

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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

As I hinted in my last update for The Gavel, August has been one of the busiest months of the year, not in terms of vehicle numbers, but certainly in terms of sale conversions and prices achieved. Undoubtably, the pressure on all our finances throughout the winter months will have an effect, but the demand for quality used cars appears to be as strong as ever. 

As we have now reopened most of our auctions to physical buyers, the choice offered to our customers to be able to attend in person or still use our online facility has been gratefully received, and while our online attendances remain strong, many buyers are dipping their toes into the physical auction arena again. I’ve personally enjoyed seeing many of our loyal customers in person again who over the last two and a half years had become a number on a screen. 

It’s also a big change for many of our customers who have new buyers and disposal managers, many of whom have never attended a physical sale and have been sat behind a computer screen. Rest assured, our excellent teams have been on hand to help anyone who needs it and I’m sure those who got their first taste of a physical auction will be back for more. 

As we head into autumn, demand will become even stronger for quality used vehicles, but with the lack of supply of new vehicles, prices will only go one way. 

Many vendors who are currently contracted to online-only auctions with our competitors are looking to change their remarketing supplier as it has been proved that both prices and conversions are improved when physical auctions are an option. We have also had several new vendors joining Manheim over the past few months who have found the transition so much easier than they could ever have imagined. I expect the list of these new customers to expand over the coming months judging by the interest we have had, and they will be welcomed with open arms by us all. 

Enough has been said about the economic issues the country is facing so I won’t dwell on those in this update. But I will say that despite this, I cannot see any drop off in prices or demand in used vehicles going forward. A lack of supply will continue to be an issue, and with the new plate change now upon us it could get even harder for dealers to find the exact vehicles they need. But at Manheim we are in the best possible position to provide the vehicles the market needs, with a packed auction programme and a huge variety of stock to choose from.

Stuart Peak - LCVs

Stuart Peak on Manheim rostrum

It’s official – the summer holidays are over! So, what will this mean for the used LCV market?  

Well, the last two months have exceeded my expectations and we have seen very little sign of any drop off in market conditions that we would usually see over the summer months. Average selling price increased throughout August to £9,880, first-time conversions remain consistent, and days to sell also reduced by 3.5 days. All signs of a healthy marketplace for sure.  

As I write this, I have Shepshed’s LCV sale running in the background and it’s pleasing to see plenty of buyers attending in person and a very healthy number of buyers logged on to the sale via Simulcast. Throughout August, 20% of all LCVs sold went to a hall bidder. Prior to Covid this would have been around 60% on average, but I predict that we shall see the number of vehicles sold to a hall bidder increase now that we are out of the holiday period.  

Will we ever go back to selling 60% of vans to a hall bidder? Honestly, I doubt it. As we know, the world has changed, and people have adapted to new ways of working. Our mission is to give customers choice to buy how they want to. While online will likely remain the popular channel, many of our buyers wanted to return to physical, and to say that reopening the auction halls has gone down very well is an understatement. 

In September last year, the market went to levels that we have never seen before. Do I see this happening again? It is certainly possible! Looking at how the market has tracked this year, we know that we have seen reductions in guide values which have helped to keep the market turning. I undertook some recent analysis of our arrivals so far this year and up until last week, our arrivals were virtually identical compared to the same period in 2021. In fact, we had seen just seven fewer LCVs arrive. Very small margins. 

The point I am trying to make is how consistent the wholesale market has been with volumes of vehicles and prices. Comparing performance this August compared to last year, the main things to note are that sales were roughly 6% stronger vs. guide values last year and we have also seen vehicle age and mileage increase – a trend we’ve seen throughout 2022. 

For anyone that is concerned about guide values reducing over the last six months, all I’ll say is the market continues to perform at incredible levels and is far ahead of pre-Covid levels. The devil is in the detail, and when looking at how many models have reduced, they are only now coming back into line with where values were at one year ago, despite vehicles being a year older now. This highlights how much we saw values increase in the second half of 2021.  

To summarise – the summer period was positive, the demand for used LCVs continues to be strong and I see more positivity on the horizon throughout September and beyond. I can’t wait to see what the coming months bring! 

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