The Gavel - July 2023
Wholesale market opinion from our resident car and LCV auction experts, Kevin Blincowe and Stuart Peak.
Kevin Blincowe - cars
What a fantastic June for Manheim Auction Services! Buyers were buzzing, stock was flowing and there were many happy faces to be found across our auction sites. While there were fewer arrivals, this only ramped up the competition among buyers.
Dealer sales remain rock solid, but for our buyers it’s all about finding the right car at the right price and vendors need to be ready to sell. I always say that vendor representatives need to be at the sales to get a real feel for the value of those cars that require some work and those who didn’t attend miss out on opportunities to strike a deal at a fair price for everyone.
I wholeheartedly believe that our teams are the best in the business at connecting buyers and sellers, as proven by our hybrid sales programme which remains hugely popular with dealers. We continue to see strong attendance as buyers hunt for the best stock to fill their forecourts.
Although there were fewer quality cars up for grabs in June, this scarcity made the competition fiercer and we saw stronger conversions and higher prices as a result, particularly on Grade 1 and 2 stock.
Buyers who follow certain vendors are reaping the rewards of their loyalty with vendors like CarShop and Arnold Clark reacting quickly to changing market conditions and quality of stock to keep the wheels turning.
However, it seems that some vendors missed the boat by not showing up at the block. It is very easy to value a car using the plethora of valuation tools out there but sometimes you need to go with a bit of gut feeling that technology can’t give you, especially when it comes to cars with bodywork or mechanical issues. As a result, we have seen some vehicles going in circles without finding the right buyers. This repeated cycle emphasises the need to grasp market dynamics and the teams have been working hard to get cars revalued and more realistic reserves set on re-entered stock. Conversions are still very good, so we aren’t talking about lots of cars, but obviously the aim of the game is to get them sold so the less of these, the better.
Looking ahead, we’re expecting the number of cars coming to site to slow down a little in July and August. But all this is ahead of what should be a September storm, particularly as this year has seen the return of normal market cycles. While there might be a temporary dip in activity, this presents a prime opportunity for smart buyers and sellers to plan and position themselves for what’s to come, clearing the decks of old stock that is sticking, and to get ready to hit the ground running come the new plate change.
Stuart Peak - LCVs
It’s hard to believe writing this month’s update that we are now firmly in the second half of the year. Looking back at the data from the first half of 2023, it’s safe to say we have had a cracking start to the 12 months with our LCV sales.
2023 has so far been the year of the return to normal market cycles. Q1 kicked off with a bang, while Q2 had a softer feel. The main driving factor behind these cycles is that used supply has returned, alongside an increase in the production of new vans. Whilst delivery times are still a challenge, backlogs of orders from up to 18 months ago have started to filter through and I don’t see this changing as we go into H2. We may see a slight lull over the summer, as we would do in any normal year, but I predict used volumes to remain consistent.
So how has an increase in stock levels affected the market? Well, with more choice available, buyers can afford to be pickier. First-time conversion rates were reduced by 9% in Q2 vs. Q1 which came as no surprise. The market did have a tougher feel to it, but the overall volume sold throughout Q2 was very much on par with the start of the year despite this reduction. In fact, June proved to be our strongest month of the year so far for total LCVs sold. Our sites are busy and our sales are jam-packed with vans five days a week, so we can’t complain.
The small van sector has seen pressure, as de-fleeted volumes have increased, particularly in the three-to-five-year-old bracket. Demand for this stock was strong in Q1 as there was still a shortage, but with more of this type of stock now available, prices and demand have started to reduce.
In many cases, guide values have some catching up to do with market conditions and I’ve seen examples of vans booking the same money as they did a year ago when they were a year younger. We are currently going through a slight market realignment within certain sectors but those vendors that can react the quickest will reap the rewards.
One final note, and something hot off the press for you. We held our annual LCV premium offsite sale on behalf of Novuna Vehicle Solutions on Friday 7th July, and what a day it was. Our largest event to date, with 171 vans entered and 171 vans sold. It was great to see so many buyers attend on the day from all areas of the country, and we were also joined by a huge audience of online buyers – a testament to our hybrid auction capabilities.
With £50 from each vehicle sold being donated to our charity partner Shelter, a whopping £8,657 was raised on the day. So, a huge thank you to all that attended and supported the event, and of course a massive thank you to Novuna Vehicle Solutions for hosting the sale. Roll on the next one!