Declining LCV registrations in recent months are actually the result of SMEs migrating to used vans in uncertain market conditions, rather than larger companies putting new van purchases on hold.
So says Shoreham Vehicle Auctions (SVA) following a 5% fall (7,689 units) in new LCV sales up to 3.5 tonnes GVW in the first five months of 2017, according to SMMT figures.
Alex Wright, MD of SVA, said the switch to used from expanding smaller companies who are concerned at the outcome of the election and Brexit spells good news for the used market as the demand for one to three-year-old used LCVs is set to grow over the coming two years until the true results of Brexit are realised. He added that this should also ensure that July and August see a stable used market with demand growing and prices remaining at their current levels rather than suffering from the normal summer dip.
And Wright also said there were no signs of larger fleets either putting new van purchases on hold or dramatically increasing their used replacement cycles as they did between 2009 and 2013, and commented that SVA is still seeing a steady flow of three-to-four-year-old used ex-fleet stock coming into the market, which will help satisfy this demand from SMEs.
A sufficient price gap between the nearly new demonstrator stock and the three-year-old van market should also ensure that prices of the latter aren’t damaged and SVA highlighted that conversion rates have remained consistent at between 80-90% at most of its auctions in 2017.
“This price gap means that independent dealers are buying in three-year-old stock and older to complement some of the newer stock they are able to source from the manufacturers. This gives them a mixed range of stock which helps them manage their own businesses more effectively,” said Wright.
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