The LCV market is often seen as a valuable barometer of business confidence. June saw the sixth month of declining registrations for the van market, according to the SMMT. Much like the new car market, at least some of this can be attributed to supply chain shortages holding the market back.
The net result was that 144,384 new vans, pickups and 4x4s were registered in the first six months of 2022, down by almost a quarter (-24.6%) compared with the same period last year. The fall looks worse because H1 2021 saw record sales as pent-up demand for online delivery vehicles and a bounce-back in the construction sector boosted registrations.
The used LCV market
Room for some encouragement!
After five months of falling values, according to data from BCA, which saw average LCV values in May 2022 fall below £10,000 for the first time since December 2021, June saw small price rises. Values increased to an average of £9,800 in June, up by £283 compared to May.
Reflecting on the news, BCA noted that while average LCV values had risen for the first time in 2022, demand remains volatile, with professional buyers continuing to focus on condition and presentation as critical factors, particularly when a vehicle has a good retail specification.
The environmental factor
The challenging LCV market in the UK is shared across Europe, where sales are also down. As well as supply issues, zero-emission goals are cited as a reason for falling volumes. It seems some new buyers may be prepared to hold on and wait for an eLCV, which has some logic.
Incentives from governments and the potential 'penalties' of higher taxes, record diesel prices, carbon offsetting costs and charges to enter low emission zones in towns and cities, in which a high percentage of last-mile customers are based, all favour an electric vehicle.
In the meantime, such buyers are hanging onto their current vehicles, which may restrict supply through remarketing channels. The UK is not immune from the same trend and we see an increasing demand for eLCVs, with sales up 52.4% year-on-year – although this is still just one in 13 new vans joining Britain's roads.
I'm delighted to see an upturn in LCV values. However, BCA's use of the word 'volatile' neatly sums up the trading environment for more than just used vans.
In reality, from my many years in the industry, I appreciate that most people in the trade will know how vital condition and specification are when it comes to used LCV values. It is over to dealers' agility to match demand with supply that will, as always, be the ultimate test. There are economic challenges ahead, but inevitably this brings with it opportunities.
Richard Irving, Head of Field Sales