Perfect balance of supply and demand gives LCV market a super-charged start to the year

Wholesale van arrivals hit a five-year high in the first two months of 2023 

The LCV wholesale sector continued to fly during February, with Cox Automotive reporting a further +1.28% improvement on performance indicators, a record number of commercial vehicles passing through its auction and de-fleet networks, and record demand and appetite from buyers. 

February outperformed an already strong January to establish a new five year high. During the first nine weeks of 2023, Cox Automotive reports that 17,660 LCV units arrived through its Manheim Auction Services (MAS) and Manheim Vehicle Services (MVS) locations across the UK.   

A 6% year-on-year increase in wholesale volumes sold is explained by super-heated buyer demand. Manheim's auction channels witnessed record demand, with 84% selling first time (18% stronger than February 2022), a +1.2% increase on January’s performance.   

Matthew Davock, Director of Commercial Vehicles, Manheim Auction Services commented: “After a very busy and enthusiastic start to 2023, February did not disappoint. We’ve seen significant year-on-year volume increases throughout our fleet, lease, rental and finance portfolios. This surge aligns with the positive spike in new registrations; February was the strongest period since 1998 and an 8.5% increase versus February 2022. This is welcome news for the used market as it means the LCV assets that fleet operators have been hanging on to are now finally starting to be de-fleeted and pushed into the wholesale market channels.” 

Noticeable stock age and mileage changes 

As reported in Cox Automotive’s 2023 forecast (found within its latest AutoFocus automotive insight update), wholesale van age and mileage dynamics are expected to play a significant role during the first half of this year.   February saw the oldest age profile on record, with vehicle age increasing to 75 months (six plus years of age). Sold stock was +5 months older vs January 23 and +13 months older vs February 22 on average, a significant change for the wholesale marketplace dynamics. 

Mileage dynamics and the de-fleeting of ‘pandemic worn condition’ vans were again evident during February. Average mileage hit 81,132, representing a marginal increase v January 23, but most noticeable, half of the vans entered into sale showed an average mileage of 129,616 miles. The performance sweet spot during the month was the 3–5-year-old category, which made up 32% of overall volume and achieved 109% of guide values on average. These vehicles had an average recorded mileage of 69,103 miles.  

The average selling price across all vehicle categories remained strong at £9,107. Euro 5 or older represented two-fifths of the stock sold and achieved £4,499 on average, a +4.42% increase on guide values verses January, while Euro 6 compliant vans – representing 60% of stock sold - achieved an average hammer price of £12,165, a +0.57% improvement again against January’s price guide performance. 

Buyer sentiment and feedback 

Matthew adds: “Buyer feedback gathered during late February makes it clear that this has been the strongest start to a year for some considerable time, with eight out of ten reporting overall consumer demand and health is much more positive. Overall buyer numbers at our auction events have been incredibly strong, with 18% more buyers being actively present vs year on year and catalogue views hitting the dizzy heights of 3,682 views per auction event for the month.  

Cox Automotive’s buyer feedback highlights three key components that are underpinning current demand: 

The gap between a new and used van price today has never been so big. Used vans are on average are 38%-42% cheaper for a 2–3-year-old model versus its new equivalent, and a humongous 58%-60% cheaper for a 5-6 year used example in today's wholesale market place 

The ULEZ rollout is having an impact on certain parts of the country with a number of dealers reporting increased Euro 6 demand from customer enquiries  

As the financial year draws to an end and tax bills are settled, many buyers are reporting a positive sentiment from their customers, with many now looking to upgrade or add vehicles to meet either compliance or business demand health for 2023.  

Matthew concludes: “All in all, we’ve seen a blistering start for the used wholesale market and all the signs are this will continue throughout March and the commercial vehicle market will end the quarter in a very positive position.”