2021 is likely be a “year of two halves” for new and used van sales performances, with recovery more likely in H2 and still dependent on a number of factors.
So says Cox Automotive, which has issued a more cautious forecast for 2021 new registrations compared to the Society of Motor Manufacturers and Traders (SMMT).
The SMMT’s latest forecast for 2021 was published in October 2021 and sits at 328,000 new LCV registrations. This would represent a 12% increase over the figure of 292,657 new vans registered last year; which was down 20.0% on 2019.
However, Cox Automotive said sees 2021 new registrations tracking similarly to 2020 with a top end forecast of 285,000.
Cox Automotive said its forecast was more prudent, due to its views of the ongoing Covid restrictions, softening retail demand and recessionary economic recovery patterns.
Matthew Davock, Manheim director of CV, said while its research indicated that buyers are anticipating defleet supply to increase as typically happens in Q1, speaking to corporate fleets, this defleet supply is simply not coming; just as in Q3 last year.
“For example, many report a trend for contract extensions in the face of business uncertainty,” he commented. “Whilst it is logical that January will see many dealers observing more auction sales than bidding, the additional overlay of lockdown and rising unemployment will impact supply and demand activity as it did last year. Euro 6 will remain the golden child of the used van sector with any new supply shortages reflecting in the used values achieved.”
James Davis, customer insight director, Cox Automotive, said the firm believes the first six months of 2021 will track similarly to 2020 despite the UK having escaped the Brexit no-deal tariff scenario.
“This is because most of the overarching market determining factors remain unchanged,” he added. “We see lead times normalising as global supply chains are aligned in recovery with Covid-compliant working practices, but this is against the backdrop of reduced factory outputs and challenges in specific areas such as logistics. What is clear is that, in this second lockdown, we have escaped outright factory closure and broken supply chains in previous lockdowns when Covid swept the globe with lockdowns from East to West.”
Davis concluded: “The second half of 2021 will be determined by the vaccine rollout programmes and the phased return of the economy. The shape and speed of recessionary bounce differs hugely but I feel sure that the impact will be felt in the new and used van market until the middle of the decade. CV registrations have always closely tracked GDP as a reflection of the health of the economy and the plethora of stimulus and support packages must be accounted for at some point.
“There is significant pent-up demand from household savings (termed in the media as ‘revenge spending’) and no doubt the UK’s businesses, specifically SMEs and sole traders will benefit from spending from both domestic property improvements to Government backed national infrastructure projects.”
To access the 2020 Cox Automotive Insight report, which includes more detail on the new and used van markets, click here.
