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Van blog
Van blog
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28/08/2009 Something old, something new
It’s been a tough year for the van industry. Since the current recession began last year, commercial vehicle sales have fallen month after month, fuel prices have fluctuated wildly and major manufacturers have teetered on the edge of bankruptcy
But the doom and gloom is not universal. One sector of the motoring industry has, surprisingly (or unsurprisingly!) done much better than expected: the used vehicle market.
As Louise Wallis, head of the Society of Motor Auctions, recently told Fleet Directory: “Sellers at motor auctions have enjoyed the best possible conditions over recent months, with reduced supply and good demand from buyers, resulting in high conversion rates and strong prices.”
According to CAP, the Ford Transit accounts for as much as a third of all used panel van sales.
CAP current valuation manager Ken Brown told Fleet News: “As a result of this, any models in reasonable condition are sure to attract strong bids, especially when in metallic paint.”
Condition is the single most decisive factor in the used van market, notes CAP, with demand strongest for used vehicles in excellent condition with enhancements.
Visible damage and poor preparation can scupper panel van auctions, it adds.
According to Alex Wright, Sales Director for Manheim Auctions: “We are now well into the seasonal period when values traditionally harden. This period usually begins as early as May yet throughout June and July we have seen consistently strong attendances both in the auctions halls and online with healthy bidding and high conversion rates. The marginal fall in average wholesale used van values of just 0.6 per cent in July, following a fall of 0.5 per cent in June, leads us to believe that there is still an underlying strength in the wholesale used van market.”
Manheim has also benefitted from the increasing popularity of online buying, selling according to a recent press release, as many used vans and trucks via the internet in the first six months of 2009 as it did over the whole of 2008.
Over that period, 15.2 per cent (6,017) of the 40,000 vans and trucks sold by the company attracted online bids, and only a little less than half that were sold to online buyers (7.1 per cent or 2,820 vehicles).
Rival auction house British Car Auctions saw a rise of 2.8 per cent (£100) in average used van values of July.
Motor industry information specialists Eurotaxglass take the same view – that the used van market is booming.
Commercial vehicle editor George Alexander says: “Nearly every tidy van up to 2.8 tonnes is proving popular, with the relationship between supply and demand being in balance.”
So what’s driving the used van boom? Belt-tightening in response to the recession has undoubtedly played a role, with fleets economising and offloading excess vehicles onto the used market. Increased supply (over supply from some perspectives) has acted as an incentive, with a rich choice boosting the numbers of price-conscious van and vehicle buyers flooding into the showrooms and auction houses.
Meanwhile, the picture remains one of gloom at the new end of the sector. Over the last year, we have seen the collapse of once established names like LDV, while other international manufacturers have struggled with plunging sales.
Recent figures from the Society of Motor Manufacturers and Traders (SMMT) revealed that van sales over the first half of 2008 were 45 per cent down on the same period last year.
Vauxhall alone saw a 48 per cent drop in sales over the first half of 2009, followed by Ford and Citroen (both down 42 per cent). Volkswagen is not far behind, with a 36 per cent drop in sales.
Commenting on the bleak figures, SMMT Chief Executive Paul Everitt said: “The commercial vehicle market continues to reflect the very difficult conditions facing business buyers, particularly those in the freight transport and construction sectors.”
However, van registrations may cease to tumble by the end of the year, he added, but if they do, it will be at the lowest levels since the early 1990s.
Even the much discussed scrappage discount scheme has failed to lift the dark clouds hanging over new van sales. As recently as mid-July, just 325 vans had been sold under the scheme.
Ford has been the biggest winner from the scrappage scheme, having sold 200 vans and commercial vehicles by mid-July - compared with 12,000 cars. The runners-up were Mercedes-Benz, with 147 sales, Volkswagen with 83, and Peugeot with 80. Renault had sold 58, Vauxhall 30 and Iveco just seven.
Industry figures blame the van sector’s sluggish response to the scrappage scheme on the ten year cut-off date: only vehicles over that age are eligible.
LCVs are typically worked much harder than cars, and this intensive usage wears them out more quickly they claim. Consequently, there are far fewer ten-year-old vans on the road.
In the words of SMMT Commercial Vehicle Manager Robin Dickeson: "In respect to [commercial vehicles], the scheme is imperfect and would be more relevant if it was set at seven years."
There can be little doubt that the recession has had a devastating effect on the motor industry, both at home and abroad. How cheering then, to read recent reports that the worst may already be over. Earlier this week, amidst reports of an upsurge in business and investor confidence, Michael Izza, Chief Executive of the Institute of Chartered Accountants, went as far as to tell the BBC: “...the UK recession is at an end.”
Could a brighter dawn for the motor industry be close?
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31/07/2009 Van hours - The DfT wants to hear from YOU!
The Department for Transport (DfT) launches widespread consultation into the hours van drivers across Great Britain can work.
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10/07/2009 LDV: part of our British commercial vehicles heritage gone
This has not been an easy year for the company once known as Leyland Daf Vans. Not a single Maxus van has rolled off LDV’s Washwood Heath production line since December, and the first half of 2009 proved to be a not-so-merry-go-round of discussions with sceptical would-be buyers and fraught negotiations with a government reluctant to part with the cash needed to keep the company going.
It looked for a while as though Weststar, a Malaysian motor manufacturer, was all set to save the day. Negotiations to buy the Birmingham firm reached an advanced stage – and then collapsed. The necessary credit could not be obtained.
LDV went into administration, hundreds of staff lost their jobs. It looked like it was all over.
But perhaps...not quite yet. Last week came the unexpected news that Weststar is “almost certain” to make a second bid for LDV – what remains of it anyway – now that administrators are in place to protect the new buyers from the firm’s former creditors.
If Sky News is correct and Weststar does make a return to the negotiating table, it will come too late for the LDV staff who have already lost their jobs, joining the dole queues in an already disadvantaged part of Britain’s second largest city.
So has LDV, a company with a history stretching back, via multiple name changes and buy-outs, to the Wolseley Motor Company almost 100 years ago, finally come to the end of the road?
Time will tell. A new Weststar bid may come with guarantees not to “lift and shift” the firm’s assets to Malaysia. After so many months of uncertainty, such an agreement would be welcome news. British jobs would be saved and a veteran of the UK’s motor industry will live to fight another day.
Or it may not. If what remains of LDV does get packed up in boxes and shipped to Kuala Lumpur, what will be left of the UK’s once dynamic van industry? The answer is, not much. Once dominated by Ford, production of the iconic Transit is set to be transferred to Turkey, while the future of Vauxhall Vans in Luton remains uncertain after Vauxhall’s recent sale to a consortium centred around Canadian manufacturer Magna International.
As LDV slid towards administration, its increasingly desperate managers pleaded with the government for financial assistance, citing exciting plans for electric van models and pointing out the much higher costs of a surge in benefit claims from jobless workers and a further economic downturn in one of Birmingham’s poorer areas.
So why didn’t the government listen? Yes, it offered a bridging loan to assist Weststar’s plans, but the willingness of other governments to invest billions in the protection of troubled manufacturing industries was noticeable by its absence.
Compare and contrast President Obama’s efforts to save General Motors in the US.
Gordon Brown’s government was all too willing to help the banks, but as we all know, they are more important than old manufacturing industries these days. Quality physical products count for less than intangible zeros on a computer screen.
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21/04/2009 Will you miss the CV Show?
In late 2008, organisers of the Commercial Vehicle Show were defiantly saying that the 'show must go on'. Held at the Birminggham NEC every April, over the years this trade show has grown in popularity and is an excellent opportunity fo manufacturers, dealers and other trade organisations to reach the commercial vehicle market - both fleet and retail buyers. Van manufacturers such as Mercedes and Ford dominate the stands with huge presence, looking to out-perform the other manufacturers with innovative new products and services to move ahead in the commercial vehicle business. However, as we all know automotive manufacturers are having incredible turbulent times in this recession. Gradually all of the major players pulled out of the CV Show and this created a domino effect which meant that the event lost its appeal causing it to be cancelled.
Here at Vansunited, we will certainly be missing jumping in and out of new tractor units and checking out the latest new van models - will you be missing the CV Show this year and will oyu be looking to attend or visit the CV Show next year?
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14/11/2008 Is electric the way forward?
With the price of fuel soaring and the credit crunch showing no signs of releasing its grip, the time may have come for electric vans.
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23/10/2008 Fleet drivers opt for lone driving
A survey by Masterlease has revealed that despite the plus side of sharing a van, fleet drivers are just not keen on the idea
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17/10/2008 Choose a Volkswagen Transporter for cost effective travel
A Volkswagen Transporter has excelled at the MPG Marathon 2008 by achieving 52.48 mpg.
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09/10/2008 The iconic VW Transporter camper van
This week, Peter Townshend from The Who has hit the headlines for changing his iconic Volkswagen camper van for a spanking new Transporter Sportline.
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01/10/2008 Electric vans - should you buy one?
Electric vans have never really taken off in the UK. The main reason being the short range you can drive between charges puts people off.
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17/09/2008 Save cash in the crunch
When it comes to the crunch, read tips on how to save money on fuel.
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