Print

Posted in:

Van market double whammy to impact operators looking to meet CAZ requirements

Fleet operators looking to source Euro 6 vans to meet forthcoming Clean Air Zone requirements are likely to be hit by a double whammy of increased prices on used versions and longer lead times on new models. 

Shoreham Vehicle Auctions MD Alex Wright
Shoreham Vehicle Auctions MD Alex Wright

The warning comes from Shoreham Vehicle Auctions (SVA) ahead of the 2019 rollout of Clean Air Zones across 33 local authorities. 

According to SVA managing director Alex Wright, new Euro 6 vans will become increasingly difficult to source as manufacturers move their production into the left-hand drive economies that are starting to grow.

Although February UK van registrations put in their best performance in a decade, 2017 SMMT data shows new LCVs fell 3.6% to 362,149 units in 2017, marking the first decline since 2012. 

“OEMs have invested tens of millions in aggressive discounts and finance offers to drive sales in the UK in the past few years. When you have other European economies that are growing and where demand for new vans is high then surely they will redirect their marketing money away from the UK,” said Wright.

“That will mean prices of new Euro 6 vans will start to creep up, and UK operators will be faced with longer new van lead times as new stock becomes more restricted. They may even restrict supply to high-discount, high-volume sectors of the market.” 

Wright added that the forecast doesn’t take into account any potential challenges forced on UK operators by Brexit, or a potential strengthening of sterling once Brexit goes live. 

And Wright also warned that the introduction of CAZs, including the London Low Emission Zone on 8 April 2019, will bring about high demand for used Euro 6 vans, with prices to go “sky high” after 2020. 

“An increasing number of operators will be forced to sell their Euro 4 and 5 vans that will be snapped up by operators unaffected by the legislation in regions like Wales, Scotland and the south west. Demand for Euro 6 vans will continue to increase in 2020 and beyond and prices will rise accordingly. Just as we think the used van market has reached its ceiling then something like this happens. With the post-Brexit UK economy likely to grow then it could be a major challenge for SMEs looking to buy used van stock to support the growth of their businesses,” said Wright.

For more of the latest industry news, click here.

Written by Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.

4143 posts