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30 Jun 2008

Used commercial vehicle dealers look for better times in 2009

Non-franchised commercial vehicle dealers report that the market has slowed, with a significant decline in retail activity over the past few months. Coinciding with the traditional summer slowdown, dealers are taking a further knock from an uncertain economic outlook that has hit customer confidence.  

The worst potential outcome is for prices to be driven ever lower as a growing number of vans are offered to a customer base that is shrinking, according to the experts behind Glass's Guide to Used Commercial Vehicles.  

"Providing volumes do not grow too much in a sluggish marketplace, and with the hope that by the start of winter the worst of the country's economic problems are in remission, things could look more promising by spring 2009," suggests George Alexander, Chief Commercial Vehicle Editor at EurotaxGlass's.  

Analysis shows that prices are in retreat across all light commercial vehicle sectors, after many months of stability when prices held firm.  As yet, this weakness is mostly restricted to those less well-presented vans with high mileage or damage.  Elsewhere, falls in value represent little more than standard monthly movements driven by age and wear and tear.

"If we take into account the woes becoming manifest in the wider economy and the escalating price of fuel, which combine to put the squeeze on those small businesses that typically make up the vast majority of any dealer's customer base, then it becomes clear that there is trouble coming in our direction," comments Alexander.

"Currently, the mood amongst dealers is relaxed.  Sentiment for the nicest used stock has held up well, although it is clear that few have the appetite for untidy vans at any age, with the market feeling as though the summer turndown had come early in 2008."

Used CV market - key trends
George Alexander highlights other key trends in the used CV market:

Used lightweights

  • In what is now a buyer's market, untidy vans will be left floundering and facing an uncertain future unless end-user buyers, willing to pay knock down prices, can be found.
  • Of late, a regular sight on the open market has been the Vauxhall Corsa and Fiesta TDCi with prices close to Guide Trade for the best examples with supporting documentation.
  • Reasonable numbers of Citroen Berlingos, Renault Kangoos, Fiat Doblos and Vauxhall Combos are to be seen at most LCV sales with those offered in clean condition, preferably with side loading doors, receiving plenty of attention from dealers.
  • At auction, crew-cab versions of the Vauxhall Combo have been appearing in higher numbers with most attracting keen interest.  However, even when tidy and boasting low warranted miles, new-shape Vauxhall Astravans are currently coming under pressure at auction, possible as potential buyers become aware of the discount deals available on new.  However, the best-presented old and new shape Sportive models on offer will still generate competitive bidding, with top dollar being paid.  Anything presented in a poor state of repair, or with higher than average mileage, usually falls by the wayside.
  • Late-year refrigerated vans in this sector are currently proving to be good sellers, whilst older and untidy examples sell at prices well below the corresponding standard van.  Any such stock requiring major refurbishment in order to comply with the regulations on transporting chilled foods is close to being unsaleable.
  • Ford's Connect is another van that is readily available at auction, yet here again the best low mileage examples sell to Guide with those less popular models doing especially poorly.
  • At times, too many Connects fill the auction halls, but to date this hasn't deflated sentiment for the pick of the crop, although big volumes of basic T200s typically result in patchy conversion rates.  Longer-bodied T230 variants were performing better but the recent influx of T220 vans in similar guise dampened performance.
  • Increasing numbers of Caddy vans at auction are having the effect of eroding prices with any further summer slowdown bound to do more damage.
  • Demand has held firm for old-style Citroen Dispatch and Peugeot Expert models and, with noticeably fewer having become available of late, interest remains firm for the cleanest vans with sensible mileages and service history.  Similarly, older examples continue to be seen as an attractive proposition by retail customers with homes being usually found at the first time of asking.

Used heavyweights

  • The truck market has also been hit by weaker retail sentiment, yet due to the nature of heavy markets and those who operate trucks, the effects, as yet, have been more modest.
  • As seen for their lighter counterpart, prices for most chassis have begun to slip with this being especially noticeable for poorer ex-fleet vehicles that have been on extended contracts.
  • Unsurprisingly, hard-used stock that offers a limited lifespan to any subsequent customer inevitably suffers.  As has been seen in previous periods of market apathy, it is the nicest examples of premium stock that will navigate troubled waters best.  
  • This month, it is values under the Glass's Guide Disposal heading that see the harshest downwards movement whilst gentler treatment is applied to Guide Trade.
  • At auction, buyers of 7.5 tonne boxes and curtainsiders are spoilt for choice and in a buyers' market punters have inevitably become choosy.  Lesser stock that does not fit the bill can suffer a hefty price drop.  At this weight a tail-lift, for many dealers, is a pre-requisite whilst for others the option is considered to be far less crucial.
  • Currently, tipper chassis are in high demand with prices holding up well, yet any influx of ex-council lots will force the price to rapidly move downwards.  At 18 and 26 tonnes, volumes are low which ensures that the sentiment for all good stock that becomes available remains firm.
  • Demand for drawbars chassis often proves to be patchy with a particular sensitivity being shown towards age and power output.
  • Whilst trade buyers are keen to acquire late-year refrigerated boxes, they show next to no interest in older lots unless there is a history of refurbishment with the chiller unit having been re-certified. 
  • Late year Euro III and Euro IV tractor units still set the pace at auction, albeit a little slower as the number on offer grows.  Scania, Volvo and DAF stock make most of the running and move quickly from dealer sites if boasting a well-equipped big cab and optimum horsepower.  Apart from the occasional Scania, which will perform well, those older, well-used pre-Euro III tractor units that frequent auction sites fail to attract much interest.  However, due to extremely low volumes and the extra traction provided, all high-powered 6x4 units, whatever their age, make impressive money over a comparable 6x2 unit.