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06 Jul 2007

Used commercial vehicle values ease back

Values of used commercial vehicles are expected to fall at a more pronounced level this month, according to EurotaxGlass's.  While a modest decline in values is to be expected during the summer months, there is also pressure in many sectors of the market for values to move down towards more sustainable levels after a period when limited supply has kept prices high. 

"It was inevitable that inflated price levels on used stock would eventually need to fall in line," comments George Alexander, Chief Commercial Vehicle Editor at EurotaxGlass's.   "Rather than viewing this as a major setback, it would be better to reflect on just how resilient used price levels have proven over the past couple of years."

The situation is being complicated by manufacturers applying variable discounts according to the prevailing trading conditions, which have an immediate knock-on effect to late-year stock.  "Manufacturers must remember that to make their whole-life cost propositions stack-up, they need to protect strong residual values for late-year stock.

"The fortunes for new truck sectors are set fair over the coming six months or more due to well-documented supply difficulties, yet for light commercial vehicles conditions are likely to become tougher as we move toward 2008."


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

Used lightweight vans

  • The anticipated summer lull in the commercial vehicle market has coincided with recent dealer reports that, as early as late May and June, retail business had started to slow.  However, at auction there is little evidence of a similar slowdown, with any patchiness being mainly driven by irregular volumes.
  • Most dealers we speak to believe that as summer progresses, any turndown is likely to worsen.  Despite the tempo slowing across the used marketplace, there are still enough buyers that are keen to snap up those rare examples of late-year car-derived vans offered with the right credentials.  In particular, Peugeot 206, Ford Fiesta, Vauxhall Corsa, Renault Kangoo and Citroën Berlingo/Peugeot Partner still perform to indicated Glass's Guide levels, yet most early-year examples of these same models will disappoint.  Even so, any Ford Escort with warranted low mileage consistently achieves Guide values.
  • Over the first half of the year, low volumes have ensured that the van sectors recorded a healthy performance and this is expected to continue over the short term.  The main concern that dealers commonly cite is the risk of getting their fingers burned when offering too many late-year examples at prices approaching a discounted new van.  Accordingly, some dealers are leaning towards slightly older stock in pristine condition, which consistently returns a good profit.  Vauxhall Astra models at two to three years are hotly contested, as are those increasingly rare Suzuki Carry and Daihatsu Extol lots at auction.
  • Citroën Dispatch, Fiat Scudo and Peugeot Expert maintain their popularity with trade and retail buyers alike who compete for the best, low mileage examples.
  • The market performance for Ford Connect T200 SWB and T220 in both short and long wheelbases - which are to be seen in plentiful supply - have not proved as robust.  Here, often sourced from utility companies, prices have slipped back as supply must be balanced against demand.
  • Trade buyers remain keen on Volkswagen C20 Caddy, especially the rarely spotted higher-powered TDI model when offered in a pleasant metallic paint with side loading doors.  Trade sentiment for clean and tidy Vauxhall Combos has improved although there are still plenty of less desirable examples doing the rounds, whilst late-year CDTi examples perform well.
  • At auction, few late-year refrigerated vans come up for sale in this sector yet strong sentiment will drive prices for these convenient and flexible units.

Used panel vans

  • Although currently the strongest of all commercial vehicle sectors, even medium panel vans are coming under some downward pressure as interest rate hikes take their toll on confidence levels.  
  • For the large panel van segment, numbers are only just in balance with demand, which means that there is notable weakness for less appealing examples.
  • Despite the holiday period taking the shine off the 3.5-tonne used van market, big money is still paid for the best Mercedes-Benz Sprinter and Ford Transit lots in particular.  
  • Chassis cabs and their derivatives are also enjoying healthy trade support.  Ford Transit dropsiders/tippers, and Mercedes-Benz Sprinter long-bodied lutons top buyers' lists with evidence suggesting that there is significant demand for double cab versions.  Poorly presented models that have been knocked about are typically left to vegetate for another week at auction.


Used trucks

  • Recently, with so many functional box and curtainsiders available at auction, buyers have become choosy, and in addition to closely assessing body condition will check out the type of tail-lift fitted and its location.  Of late, there's been a high number of pre-2000 models on offer which have had their best days and unless they are offering an unusually attractive specification will do poorly.  This particularly applies to refrigerated boxes that quickly lose their appeal regardless of chassis type unless the vehicle's body and unit have been re-certified.  
  • Drawbar rigs are never that popular in the UK yet at recent auctions a selection of late-year high-powered examples with sensible mileages sold well, although ageing units did not.
  • Currently, while most dealers are happy to hold on to the nicest stock in the belief that its value will hold firm, the difficulty is finding quality chassis.  Few are tempted to trade out of any over-age stock and choose to hold on for a retail sale.
  • Up to five years of age, Euro III 4x2 and 6x2 tractor units are proving exceptionally popular with DAF, Volvo and Scania units standing just ahead of Mercedes-Benz and MAN models.  Iveco's Stralis is starting to be recognised as a capable vehicle, but as yet, its market worth stands a notch below the more established marques.
  • At auction, high-powered 6x4 tractor units command the strongest prices yet the number of such late-year lots on offer is minimal.
  • At recent trailer sales, most of the stock up for grabs sold reasonably well.  The traditional comment still applies, that the best trailers are still doing the job and unless a company goes into receivership, or closes its doors, rarely do they find their way onto the market.  Refrigerated boxes continue in fine form with most early examples likely to be shipped abroad.  Skeletals and flats are still good news when their frames are not either bent or twisted, as are the nicest 13.6 tri-axle curtainsiders with tippers being highly sort after.