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Calming Buds of May: Cox Automotive reports a “changing marketplace” for LCVs

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May has been another record-breaking month for LCVs, according to Cox Automotive, after the number of vehicles processed in its Manheim auction lanes and defleet centres rose for a fifth consecutive month. That is despite an overall (and expected) seasonal market slowdown.

Cox Automotive reports that the 15.3% year-on-year increase in new LCV registrations, reported by the SMMT, translated across into the used market during May. A total of 7,626 commercial vehicles were received by its Manheim Auction Services and Manheim Vehicle Services in May, a further 8% increase on April.

Its May stats show a slight softening of Euro5 and Euro6 LCV prices, but overall values remain significantly above pre-pandemic levels. Manheim recorded an average selling price for Euro5 vehicles of £4,660 (with an average age of 10 years). For Euro6 vans the price was £11,619 (with an average age of four years).

Changing profile, seasonal quietening

The profile of used LCVs entering the wholesale market continues to change with both the average age and mileage rising to 80 months and 82,000 miles respectively. Vehicle return damage is also much more prevalent: 62% of the vehicles Manheim handled during May had more than £2,800 worth of return damage on average, a year-on-year increase of 26%.

Stock numbers are increasing but the expected seasonal quietening of the wholesale LCV sector has also characterised the month. Even though 75% of vehicles sold first time through Manheim’s auction lanes, that’s still a 7.5% decrease compared to 2023’s exceptional first quarter.

Matthew Davock, Director of Manheim Commercial Vehicles, Cox Automotive said: “May has seen something of a calming in the fervour and activity we’ve seen in the first quarter of 2023, but it was nevertheless another positive month for the LCV market.

“Several factors can explain the seasonal quietening, the Bank Holidays for one thing and the traditional slowing of the retail market as we hit the summer months for another.

“Our mileage and age statistics point to the fact that commercial vehicles continue to be worked harder and longer than experienced historically. Clearly, dealers would prefer not to buy excessively pandemic-worn vehicles, but the greater choice on offer shows that they have a better opportunity of finding the vans they want now than at any point since early 2020. This is placing a pressure on guide values, as illustrated by May’s -3.3% drop versus the Q1 average.”

Flexible sales programme greases market wheels

Manheim’s May data also shows that growing numbers of buyers are choosing to attend auctions in person. While online continues to be the dominant choice, 31% of LCV sales were to a buyer in the hall during May, a steady increase on previous months. Interestingly, 46% of Euro5 stock was snapped up by a physical buyer, suggesting the in-person option is proving to be especially popular with customers seeking out older, more miles-on-the-clock vehicles.

The company’s flexible sales programme helped vendors reduce their average days-to-sell to just 11 days from collection-to-sell, a notable drop from the 16 days recorded for the same period in 2022.

Matthew believes that all car, LCV and HGV market sectors will continue to see much higher wholesale volume levels as we enter July and August. That bodes well for buyers, he thinks, as they will have more choice. But he urges sellers to be cautious around setting realistic pricing that incorporates damage, mechanical wear and wider retail market factors.

“May and June are traditionally a quieter period”, he said. “It’s the time when we see a natural shift in the marketplace.

“However, although there’s been a bit of a seasonal bite and a reduction in overall activity, there’s still clear evidence that things remain positive for the LCV wholesale sector.”

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