Article Type: Insight

Will car sharing get a post-COVID second wind?

The sharing economy and car sharing are sociologically attractive concepts. We seek to live more sustainably, and digitally-enabled business models have increased accessibility to sharing solutions. On the other hand, car sharing (and ride hailing) have failed to reduce road congestion or the number of cars in operation. They share another joint challenge: they struggle to become profitable and have been crushed through the pandemic. Dr. Christof Engelskirchen, Autovista Group chief economist, shares his perspective.

The sharing economy is driven by a desire to connect with a community, to declutter, to increase flexibility and to live more sustainably. It is often facilitated by community-based online platforms. Car sharing is a logical extension of the sharing economy and has grown in popularity over the past 10 years.  We differentiate between three types:

  1. Free-floating car sharing, where cars park on public roads within a geo-fenced area. This service exists almost exclusively in larger cities. Smaller cities (<500,000 inhabitants) do not attract free-floating car-sharing services due to expected low utilisation rates. Pre-booking is not possible;
  2. Stationary car sharing, where drivers pick up cars and return them to dedicated locations. Pre-booking is usually required. Peer-to-peer car sharing (e.g. via Zipcar or Turo) falls under this category as well; and
  3. Ride hailing. This can be peer-to-peer based or professional-service ride-hailing (e.g. Uber or Lyft). The difference to the traditional taxi ride is that it is fully online-enabled and cheaper. Depending on the supplier and business model, pre-booking is possible. In peer-to-peer-based business models (e.g. Blablacar), pre-booking is usually required.

Rise, hype, disillusionment

Shared mobility saw a rise and was hyped years ago, but was confronted with challenges even before Covid-19 put another temporary obstacle in the way. These are the known challenges for free-floating and stationary car sharing:

  • Low utilisation rates – particularly problematic in free-floating car sharing as more cars are required than in a stationary setup to allow for flexible access. Drivers use free-floating car sharing for shorter trips, which brings utilisation down;
  • High costs for parking – particularly challenging in free-floating car sharing, as these cars park on public roads or in publicly-accessible parking garages;
  • High costs related to mistreatments, service and cleaning. Higher-frequency driver changes add to the challenge. Cars need to be regularly cleaned, often daily or on an ad hoc basis;
  • Additional costs for relocating cars. Cars need to be regularly re-distributed within the network as clusters form, e.g. at airports in the morning. This requires a human being to pick cars up from remote locations and put them back into those areas that would attract most drivers to the car. This is a daily logistical challenge for free-floating car sharing but affects stationary car sharing as well;
  • Cars depreciate more and faster in a shared-driver setup. Remarketing results are substantially lower and refurbishment costs are higher;
  • Competing micromobility solutions, such as e-scooters and shared bikes, represent another challenge to the profitability of car-sharing services. Renting a Smart in Frankfurt or an e-scooter costs approximately the same: around €0.20 per minute;
  • Car sharing is challenged in two more important use cases: safety regarding transport of (small) children and in terms of cost when running multi-stop trips; and
  • Bigger cities have no particular interest in offering preferential conditions for car sharing as they learn that this service does not help manage city car parking.

Rising numbers of cars in cities

There have been plenty of seemingly contradictory views on the effects of car sharing on new-car sales, congestion and substitution. The contradictions stem from non-representative samples, methodological flaws and a non-comprehensive analysis of the topic. For example, researchers forget to simulate the faster replacement cycles of cars in shared fleets or conduct surveys amongst car-sharing customers. Lobby groups are the driving force behind many studies. This does not help to demystify the topic. Autovista Group research found that the net effect on new-car sales of car sharing is positive, i.e. the shorter holding cycles overcompensate the loss of private new-car purchases.

We see this confirmed when looking at cities in Germany where free-floating and stationary car sharing is most prominently accessible. Figure 1 shows that the car-park size has increased between 8-12% between 2012 and 2020. There has been exponential growth in car-sharing units but they still only contribute 0.05% to the cars in operation in Germany.

Figure 1: Size of B2B car-sharing park vs. total passenger car park in selected German cities

CE article - B2B parc

Ride hailing increases congestion

Ride-hailing businesses are struggling with profitability. There are concerns about the sustainability of the business model as long as cars need a driver. A scientific study from 2019, which analyses the role of ride-hailing companies on traffic congestion in San Francisco, concluded that ride hailing increases congestion. There is some substitution between ride hailing and other road trips, but most road trips add new cars to the road. Ride-hailing vehicles stopping at the curb to pick up or drop off passengers have a notable disruptive effect on traffic flow, especially on major arterials. This was evident at the CES in Las Vegas in 2019: the city lacks a solid public-transport infrastructure and if you choose to take an Uber or Lyft, signs direct you to pick-up and drop-off areas at the major resorts. Downtown, no curb pick-ups and drop-offs are permitted.

Unmet promise

Car sharing has failed to deliver against the promise of contributing to lowering the traffic problems in big cities. It does not reduce the number of vehicles. It takes up parking space. It cannibalises public transport and cities will not give preferential treatment to these services unless they see a positive benefit. Stationary car sharing is less affected by these challenges but is also far less flexible for users. Many free-floating car-sharing services have been taken off the market because of profitability challenges, not only because of the lack of economies of scale.

Even Daimler and BMW, which combined their Car2Go and DriveNow services into ShareNow, have withdrawn from major cities and countries (e.g. Florence, London, Milan, Brussels and North America). Free-floating car sharing will likely continue to be part of multi-modal mobility solutions in the future, but there will be no or only very few additional cities added to the portfolio in the short term due to the challenges around profitability. Free-floating car sharing will not be a disruptive force to inner-city mobility. It will be a niche play, if it can be operated profitably.

The outlook

Stationary car sharing will continue to complement multi-modal mobility. With the current trend towards flexible work arrangements, suburban areas regain attractiveness. Stationary car-sharing services may add further value for those areas. Peer-to-peer offers have grown through the pandemic as people continue to avoid public transport. Retail locations, or car dealers, may find a niche to offer such services. Rental companies could also enter the market with shorter-term, more flexible arrangements.

Peer-to-peer ride hailing will continue to operate successfully in a niche. Professional-service ride hailing (e.g. Uber, Lyft) will continue to face profitability challenges. Ride hailing in its current form adds price pressure on the backs of drivers that are often self-employed.

In the medium term, professional-service ride hailing could benefit from autonomous driving Level 4, as this will replace the driver. Within the next five to 10 years, it may be suitable for very specific high-utilisation cases as the technology is very expensive. It will not be used in mixed-traffic situations any time soon, due to safety and liability concerns. An example could be autonomous ride hailing to bring people from a Park’n’Ride area to an out-of-city access point for existing public-transport infrastructure. Cities that rely on a highly-utilised public-transport infrastructure will not allow Waymo and other operators to take up and load off passengers at inner-city access and switchover points for public transport. The reason is that cities need to scale and increase utilisation of public transport and to manage car traffic.

TCO Dashboard: D-SUV BEVs uncompetitive because of incentive ineligibility

In the third of a new series that considers total cost of ownership (TCO), Autovista Group has created a dashboard comparing the retail prices (including taxes) and TCO of leading D-SUV battery-electric vehicles (BEVs) in France, Germany, Spain and the UK. Senior data journalist Neil King discusses the findings.

Autovista Group’s TCO analysis reveals that D-SUV BEVs will struggle to compete with petrol and plug-in hybrid D-SUV models in France, Spain and the UK as their list prices exceed the price ceiling to be eligible for government incentives. Even in Germany, the TCO of fully-electric D-SUV models is only on a par with petrol models because of the €7,500 incentive. However, the plug-in hybrid (PHEV) BMW X3 has a lower TCO than comparable fully-electric and petrol models, despite only being entitled to a €5,625 subsidy.

TCO Dashboard - D-SUV segment

Incentive ineligibility

The price positioning (including taxes) of the D-SUV BEVs under review, (Audi e-Tron, Jaguar I-Pace and Mercedes-Benz EQC) is around €70,000 in continental Europe (£65,000 in the UK), This exceeds the price caps of €60,000 in France, €45,000 in Spain and £50,000 in the UK.

Without the aid of subsidies, the D-SUV BEVs are at least €6,000 more expensive than our reference plug-in hybrid model, the BMW X3 PHEV, and €17,000 costlier than the 2.0-litre petrol BMW X3 in France. In Spain, the price premium over the X3 PHEV for the cheapest D-SUV BEV under review, the Mercedes-Benz EQC, is over €17,000 and the Mercedes BEV costs about €28,000 more than the petrol X3. Price differences are similar in the UK too when converting the British Pound to Euro at current exchange rates. In Germany, the subsidy helps to close the pricing gap but the BEVs still cost at least €6,000 and €11,000 more than the X3 PHEV and the petrol X3 respectively.

Full-size electric SUVs can therefore only compete on price against petrol and plug-in hybrid rivals if attractive list price positioning is combined with healthy government support. List prices and/or price ceilings for incentives therefore need to be lower, and the incentives higher for these models to gain momentum.

Discounts

Pricing data is provided in the local currency for the same five models in each market, including retail list prices (including taxes), incentives, discounts, and a final adjusted retail price. The TCO is calculated as the sum of total acquisition costs and total utilisation costs. Acquisition costs cover depreciation, financing and acquisition taxes. Total utilisation costs consist of servicing, fuel, wear, tyres, insurance, and utilisation taxes.

These standard TCO results do not factor in discounts that buyers may negotiate on petrol competitors such as the BMW X3. For this reason, TCO calculations are also provided with discounts of 10% and 20% applied to the 2.0-litre, 184-hp petrol BMW X3 in this analysis.

Emissions implications

The upshot is that there is not a compelling argument for consumers to switch to electric full-size SUVs across Europe. Even in Germany, consumers are likely to favour petrol power as the BEVs do not offer a sufficiently attractive TCO advantage. PHEVs may fare better but the cost savings come with the inconvenience of charging and if the battery is not recharged, which is common among PHEV owners, the savings would of course be eroded.

This is a concern as SUVs continue to gain in popularity and, in turn, are driving up vehicle emissions. Whereas B-segment and C-segment BEVs offer competitive TCO, albeit only because of incentives, there is an argument that this is more important for SUVs as governments and carmakers alike seek to reduce pollution levels. Higher incentives across Europe, along with lower prices and incentive ceilings, would also provide a much-needed boost as the automotive sector contends with the fallout from the coronavirus (COVID-19) pandemic.

Click here or on the screenshot above to view the pricing and TCO dashboard for the D-SUV segment models under review in France, Germany, Spain and the UK.

Click here for the TCO dashboard for C-segment models, and here for the TCO dashboard for B-segment models.

Targeting non-exhaust emissions

Each year across Europe, there are around 400,000 premature adult deaths that are attributable to air pollution. Road transport emissions account for a significant share of this burden. European emissions standards continue to pressure manufacturers to reduce vehicle exhaust emissions. With new light commercial vehicles (LCVs) emitting smaller amounts of toxic particulate matter (PM) than ever before, targets are shifting to ambient Non-Exhaust Emissions (NEE).

These non-exhaust sources contribute easily as much and often more than the tailpipe exhaust to the ambient air PM concentrations in cities, and their relative contribution to ambient PM is destined to increase in the future with increasing alternative fuelled vehicles, posing obvious policy challenges for the UK government.

While emissions control regulation has led to a substantial reduction in exhaust emissions from road traffic, currently NEE from road vehicles continue unabated. These include particles from brake wear, tyre wear, road surface abrasion and resuspension in the wake of passing traffic. Also adding to road traffic PM in the atmosphere is the corrosion of vehicle components as well as crash barriers and street furniture.

Quantifying the magnitude of such emissions is problematic both in the laboratory and the field with the latter depending heavily upon a knowledge of the physical and chemical properties of non-exhaust particles. However, studies show that rapid vehicle deceleration creates large amounts of PM caused by wear to the brake linings and discs.

Likewise, emissions of PM from tyre wear increases with vehicle speed, incorrect tyre pressure and low air temperatures as the tyre rubber is less elastic. Overtime during all driving cycles, tiny particles are shed as the tyre wears. The composition of the emitted PM from modern tyres is a complex blend of mostly synthetic materials and other chemical additives that add strength, colour and weatherproofing to the tyre. Modern tyres are not biodegradable and are a significant contributor to micro-plastic pollution. Incidentally, many of the chemicals used to manufacture tyres can cause environmental impacts on their own and pose risks to human health.

Some estimates suggest current exhaust emissions and NEE contribute almost equally to total traffic-related PM emissions. However, there is no legislation in place to regulate or lower NEE ambient levels at present.

Overlook of London City gloomy exhaust emissions

Mitigation strategies for NEE

The most effective mitigation strategies to reduce NEE are as follows:

  • Reduce traffic volume
  • Where traffic is free-flowing reduce speed limits (e.g. motorways)
  • Promote driving behaviour that reduces braking and higher-speed cornering
  • Reducing the material tracked onto public road surfaces by vehicle movements in and out of construction, waste-management and similar sites

The transition to LCV electric vehicles (EV) is still in its infancy, but with major fleets like British Gas (1,000 units) and Northgate (250 units) already investing in sustainable greener LCVs, the appetite is growing. Although heavier, these vehicles should decrease PM from the brake linings and discs through the use of regenerative braking. As these vehicles rely less on frictional braking they should have lower brake wear emissions.

However, tyre and road wear emissions increase with vehicle mass. This has implications for vehicles with heavier powertrains (e.g. additional battery mass) than the equivalent internal-combustion-engine (ICE) vehicles. The net balance between reductions in brake wear emissions and potential increases in tyre and road wear emissions for vehicles with regenerative braking remains unquantified and will depend upon road type and the driving mode, as both influence the balance between the different sources of emissions.

Low rolling resistance tyres are helping slow the wear and decay of tyres during the life of the vehicle, but end-of-life recycling is not a straight forward process due to toxic materials used in tyre manufacturing. Today, tyres cannot be sent to landfill due to the chemicals that they contain. Tyres must be granulated and are now used as the base material for a wealth of different products such as:

  • Roof tiles
  • Carpet underlays
  • Running tracks
  • Artificial football pitches (rubber crumb)
  • Drainage systems
  • Road resurfacing

In the manufacturing process for brake pads, the copper content can be reduced, alternative components can be replaced for more environmentally friendly alternatives and carcinogenic material such as asbestos can be removed in favour of banana peel waste. With these changes, results show a significant reduction in fine particle emissions, whilst stopping power improves 17% and the brakes are quieter. Nevertheless, these brake pads are not in widespread use.

However, until the adoption of new environmentally friendly components, reducing the levels of NEE will be difficult. The latest ruling to support the UK’s Government Road to Zero strategy has brought forward the end of the sale of new ICE cars and LCVs to 2030. This will put further pressure on manufacturers to ramp up the development of EVs. However, the maintenance of current production processes and parts for EVs will mean that we will continue to emit high levels of NEE.

On a side note, the UK Government Air Quality Expert Group (AQEG) reported last year that it recommends with immediate effect that NEE are recognised as a source of ambient concentrations of airborne PM even for EVs. This should start to influence the parts chosen to equip new EVs as manufacturers become pressured to reduce NEE from their vehicles.

Brake dust front left view

2020 an amazing year for the used LCV market

As 2020 ends, it has been a ghastly year for so many people in private and in business terms, possibly the worst year they have ever had. However, for businesses involved in the buying and selling of used light commercial vehicles (LCVs), 2020 has told a different story.

Back in January, the LCV Market started as predicted, taking a week to shake off Christmas excesses before picking up pace with strong prices paid for the nicest stock. Strong trading continued until mid-March when Lockdown-1 arrived, stopping the country in its tracks.

Everything stopped. Factory production lines ground to a halt, suppliers didn’t supply, no new vehicles were delivered to customers, no auctions were open for sales and for the trade to have a brew beforehand and no used LCVs were bought at dealerships.

As the country sat at home ordering PPE and emergency supplies, food, groceries and everything else on the web, delivery companies realised that ‘if they ordered it, they’d need more LCVs to deliver it’. Immediately, searches on classified LCV sales websites rose dramatically and traders’ phones started to ring. The demand for more LCVs leapt to cover the delivery of the huge increase in essential equipment and products. As the country was urged to stay at home, home shopping went through the roof, causing delivery companies to report a Christmas-like spike in demand.

The demand for additional vehicles swallowed the majority of existing dealer stock, forcing the Government to help the sector by rapidly legislating temporary relaxations of delivery restrictions and drivers’ hours.

Businesses with existing fleets who would usually be de-fleeting during the summer did not. Most had little choice, but to run vehicles for longer, as there was no new stock to replace them with. In turn, this meant there was a smaller pool of second-hand stock being returned to the used market.

May saw the restart of LCV auctions, albeit only in an online format. The trade adjusted quickly, accepting the online sale process of buying remotely with the help of a series of images. The reopening of the auction houses coincided with pent-up retail demand with the initial oversupply leading to a short-term spike in transactions. This was soon replaced by supply shortages that started to starve the market of new and used stock. With customers in desperate need of additional vehicles, prices started to rapidly increase as the nicest examples across all ages were sought out.

The government had also offered small business loans and grants to help operators through the pandemic. This money was often spent on a newer van and with fewer vans for sale, this added to the unparalleled demand in the used market, sending prices even higher.

Demand has hardly faltered since Lockdown-1 maintaining prices at record high levels. Now as Lockdown-2 progresses, there is still no real sign of weakness in the used market.

In March 2019 the average selling price was £5,730, only £340 higher than March 2020. However, by October, the average selling price had shot up to £8,116, an increase of £2,726 or 33.6% over the 7 months of the pandemic.

June recorded an average sale price of over £10,750 for Euro 6 compliant LCVs, whilst pre-Euro 6 stock made up over 55% of all sales, selling for an average price of nearly £5,200. Of those who purchased a vehicle, 25% had never purchased online before.

By August, the average Euro 6 sales price had risen to over £11,400, whilst the Euro 5 and older vehicles had risen to more than £5,750.

By October, pre-Euro 6 values looked to have peaked, however, average prices for Euro 6 vehicles rallied again to nearly £12,775 despite increases in both age and mileage. The sustained appetite for retail-ready stock shows no sign of abating, with newer used vehicle prices likely to track Brexit driven new price increases.

Used LCV average selling price and first-time conversion rate table 2020

Looking further ahead to the remainder of 2020 and into 2021, there will be several factors impacting the sector and the wider economy.

Continued UK economic recovery needs to take into account the currently unknown factors of a successful vaccination programme against COVID -19 and Brexit. The possibility of 10% tariffs looms large on new vehicle list prices and 4% on parts if no trade agreement is reached with the European Union before the end of the year.

The quarter four Society of Motor Manufacturers and Traders (SMMT) LCV registration forecast for 2020 surprisingly estimated an increase of 6.6% to 288,000 units. Lead in delays on new stock, a shortage of vehicles at dealer level and two months left of the year would seem to rule out achieving those predictions. Registrations in the UK as at the end of October, remain over 24% below the same point last year.

Used LCVs will likely be the dominant revenue opportunity for dealers and OEMs for the remainder of the year and certainly the first half of 2021.

The new vehicle market is unlikely to return to any form of normality for some time, with registrations for 2021 tracking similarly to 2020. OEMs will bring forward strategy changes in line with the announcement that new petrol and diesel vans will no longer be sold from 2030. Manufacturers will accelerate the move to electric to respond to the new legislation and consumer demands.

Looking further ahead, bigger impacts upon the sector will include the clean air agenda, remote working and mobility. All will influence consumer choice with LCV fleets being increasingly chosen for specific urban, regional or national roles.

Glass’s continues to monitor the LCV market closely and has an open dialogue with auction houses and manufacturers, leasing and rental companies, independent traders and dealers as well as the main industry bodies. This information, combined with the wealth of knowledge in our CV team ensures Glass’s continue to be the most relevant in the market place.

Making waves with EV infrastructure reform

A new clean-energy strategy aimed at upgrading buildings was recently published by the European Commission. As the automotive industry gears up for a new era of electromobility, the renovation wave has the potential to transform the legislation around electrically-chargeable vehicle (EV) infrastructure. Autovista Group Daily Brief journalist Tom Geggus spoke with ChargePoint to find out more.

Christelle Verstrae - ChargePoint

‘We were extremely pleased with the announcement of the renovation wave for a very simple reason, because it touches upon private buildings,’ said Christelle Verstraeten, ChargePoint’s EU Policy Lead. At an EU wide level, everything related to publicly-accessible charging infrastructure falls under the alternative-fuels infrastructure directive (AFID), which is undergoing evaluation with a revision proposal due next year, she explained. This makes sense given that the directive was first adopted in 2014, making it somewhat dated when considering the advance of EV technology and demand. 

‘But if you talk about every charger that needs to be put in a private parking space, either at home or even possibly a private workspace, this is not AFID, it is the energy performance of buildings directive (EPBD), which is part of this renovation wave,’ Verstraeten said. As private locations are central to EV recharging, calls for greater development of this directive were made: ‘we needed a higher ambition from the EU to deploy charging stations in that space.’

Currently, under article 8 of the EPBD, EU member states are required to ensure new buildings and those undergoing renovation have ‘ducting infrastructure’ installed. More specifically, this means; ‘conduits for electric cables, for every parking space to enable the installation, at a later stage, of recharging points for electric vehicles,’ when a specific set of criteria is met.

So, there was a sense of relief when the European Commission confirmed the EPBD would be swept up in the renovation wave. ‘It is a good thing and it will be very complementary with the alternative-fuels infrastructure directive, because it is going to be private and public at the same time.’ Ensuring EVs are supported by a fully-functioning charging network will require pushing for advances on both the private and public front.

For EU member states, these directives like the EPBD act as baseline targets, which they can build upon and even exceed. Verstraeten explained that in France, the obligation to upgrade infrastructure was extended to existing buildings. Meanwhile, with its relatively high rate of EVs and contrastingly low number of garages, Amsterdam adopted a more tailored approach to installation. EV owners can ask for a charging station to be installed in the street if they are unable to charge at work or at home.

ChargeUp Europe

However, it appears current directives have resulted in fragmented approaches to infrastructure across Europe. ChargeUp, a new EV-charging industry alliance formed this year, wrote a letter to the European Commission stressing the need for a harmonised approach to the emerging market.

‘To date, we have noted that the existing AFID directive has been poorly implemented in parts of the EU and that its legal basis has led to ineffective enforcement,’ ChargeUp’s letter reads. ‘This has resulted in varying and inadequate EV-charging coverage, diverging national market approaches, different technology specifications and local technical requirements.’

The alliance pointed to fragmentation in metering requirements, mechanical-shutter specifications and concessions for charging along main traffic routes. This market confusion then becomes a barrier to investment, while lowering the potential of pan-European connectivity.

Infographic AFID

Source: ChargeUp

ChargeUp also pointed out that while the EPBD is a step in the right direction for EV charging, it is likely to have very limited outcomes due to its current exemptions. As part of the renovation wave, the group recommended revising infrastructure ambitions within the directive. ‘Increased cabling and ducting requirements need to come with increased ambition for the installation of charging points for the whole building stock, which also provides parking spaces,’ ChargeUp explained.

The legislative puzzle

Verstraeten explained that upcoming reviews will have to bring together all the different legislative puzzle pieces, like the AFID and EPBD, to form a full picture of how infrastructure can operate in harmony across Europe. Directives can set clearly defined standards and expectations, allowing providers like ChargePoint to get a better understanding of the market and where it is heading.

‘For us, if we have a clear target, it is actually easier to understand how the market is going to evolve and provide more security and certainty,’ Verstraeten said. This confidence will also extend to the consumer, where a greater understanding of the incoming infrastructure will provide a level of certainty and confidence, increasing the likelihood of EV adoption.

But because these directives do only act as targets, it still falls to individual member states to come up with goals to reach and agendas to implement. Verstraeten points out that, even then, there are still questions that cannot simply be answered by creating requirements at the EU level.

‘It is not only about having the obligation to put a charger in your garage if you live in a multi-family building,’ she said. ‘It is also about who is going to pay for that connection, and how the decision-making happens between the different owners of the buildings.’ While more granular issues like these will continue to cause ripples, it is only with a strong legislative foundation that Europe can hope to build EV infrastructure worthy of the electromobility tidal wave.

To find out how the electricity industry thinks the renovation wave will change EV charging, read Tom Geggus’ interview with the electricity industry association, Eurelectric.

The Van’s Headlights: The Renault Kangoo ZE

The Van’s Headlights

The UK Government announced in November to bring forward the ban on sales of new petrol and diesel cars and light commercial vehicles to 2030. While 2030 is a full decade ahead of the initial date by which the government planned to ban sales of new combustion-engine vehicles, certain plug-in hybrid or full hybrid cars and vans “that can drive a significant distance when no carbon is coming out of the tailpipe” will be allowed to be sold until 2035. The Department for Transport adding that the specifics of this “will be defined through consultation.” The implications for the automotive industry of this date change are colossal.

Contrary to many countries around the world, Germany has not yet announced plans to phase out the internal combustion engine. In addition to the UK, countries like Norway, Belgium, India, the Netherlands, Canada, Sweden, Denmark, France, Spain and the US state of California all have set concrete dates in the next two decades, when partial or complete bans on internal combustion engine-power will take effect.

With an urgency not encountered before, and to maintain market share, manufacturers need to reconsider new product cycle plans and powertrain investment. The £2.8 billion the UK Government has pledged, needs to be invested wisely on battery factories, incentives and infrastructure for both cars and vans if electric vehicles are to thrive.

In this month’s edition of The Van’s Headlights, the team consider the merits of the first full production electric van, the Renault Kangoo ZE van (2011 – ).

Renault Kangoo ZE van badge

The Renault Kangoo ZE

Originally launched as a petrol and diesel van range and a small people mover in 1997, the Kangoo has been ever-present on UK roads since.

The Renault Kangoo ZE was the first full-production electric light commercial vehicle (LCV) when it went on sale in the second half of 2011 and is currently number one in the European sales charts. Offered as a van, Maxi van and a Maxi Crew van in the UK, other countries also introduced pickup and tipper versions.

Manufactured at the MCA plant in Maubeuge, northern France, alongside the internal combustion engine (ICE) Kangoo. The Kangoo has over the years has seen rebadging exercises producing the Nissan Kubistar and NV250 and Mercedes-Benz Citan. Neither Nissan nor Mercedes-Benz currently rebadges the Kangoo ZE.

The Kangoo ZE has the same external dimensions as the ICE model. Its lithium-Nickel-Manganese-Cobalt batteries are located between the axles and under the load floor, allowing a single Euro pallet to fit comfortably in the standard length van and two Euro pallets in the longer Maxi van. Maximum load volume remains the same as its ICE counterparts at 4.6cu.m, however, maximum payload reduces to 640kg due to the weight of the batteries. Power comes from a 44kW 59hp electric motor generating 226Nm of torque. The 22kWh battery pack delivered a combined cycle range of 110 miles/170km NEDC, dependent on driving style and weather conditions. Its top speed was capped electronically to 80mph/130km/h.

Voted as International Van of the Year for 2012, the Kangoo ZE was also elected Electric Vehicle of the Year in 2012 and 2013 by GreenFleet.

However, when the Kangoo ZE launched, the list price did not include the cost of the battery. In a radical change to the norm, the battery was leased separately for a monthly fee, which varied depending on the mileage covered. Renault believed this would ease customer concerns over battery life degradation and the expense of replacing a battery.

At the start of the Kangoo EV life, the battery lease strategy worked. However, as batteries proved to be more resilient in real-life use, the issues caused by the battery lease for leasing and contract hire companies outweighed the initial customer concerns. The battery lease is a particular issue for second-hand buyers where they are faced with the strange concept of effectively buying a vehicle without a fuel tank and then having to commit to a separate monthly battery lease.

In response, during the second half of 2015, Renault began offering ‘Kangoo ZE i’ models alongside the leased battery versions which came with an all-inclusive price for the complete vehicle. 2015 also saw the introduction of the ‘Business’ trim name on Kangoo, allowing the Kangoo range to fall in line with the Trafic and Master LCVs.

The leased battery Kangoo ZE was phased out from the UK range when the improved Kangoo ZE 33 model was launched in 2017. The ZE 33 range came with a new battery, motor and charger, along with the introduction of a heat pump heating system. The new 33kWh battery had an improved range of 170 miles/270km on the NEDC cycle. The new R60 motor produced the same peak power of 44kW 59hp as its predecessor but is based on the more efficient R90 motor found in Renault Zoe.  Tested under WLTP criteria, the Kangoo ZE 33 returned a range of 143 miles.

Earlier this year and again falling in line with the Trafic and Master, a higher specification ‘Business +’ trim line was introduced that included front and rear body-coloured front bumpers, metallic paint, gloss black electrically operated and folding wing mirrors.

The all-new Kangoo van range, including Kangoo ZE, has been revealed ahead of its expected UK launch during the first quarter of 2022. The expectation is that both Nissan and Mercedes-Benz will rebadge the Kangoo ZE at this time.


Something for everyone

Andy Picton, Glass’s Chief Commercial Vehicle Editor recommends the Renault Kangoo as “a long-established van range that has been the preferred choice for many operators. The Kangoo ZE has taken many out of their comfort zones, but has proven to be a worthy addition to fleets operating in an urban environment.”

Andy added, “Kangoo ZE operators benefit from a growing charging infrastructure in the UK and the strong support of Renault’s Pro + dealer network.”.

The Renault Kangoo range

  • Diesel engines and an all-electric variant
  • One body style
  • Two lengths
  • Panel van and Crew Van
  • Two trim levels – Business and Business +
  • Euro compliant diesel engine line up
  • 3yr/100,000-mile warranty
Renault Kangoo ZE van charging


Renault Kangoo Mazi ZE 33 Business van (2019 – )

Standard specification on the Kangoo ZE33 Business included height-adjustable steering wheel, DAB radio CD with USB and Bluetooth, ABS brakes with electronic brake-force distribution (EBD), Hill Start Assist, Grip Xtend, RAID (Renault Anti Intruder Device), pre-heating function, standard 32A Type 2 charging cable, ZE Voice, drivers airbag, 15” steel wheels, 12v cabin power socket, bulkhead, asymmetrical 180o rear doors and remote central locking.

Renault Kangoo Mazi ZE 33 Business van interior
Renault Kangoo Max ZE 33 business van table
2019 Renault Kangoo Mazi ZE 33 Business van pros and cons table

Glass’s recommendation

  • Renault Kangoo Maxi ZE 33 Business van
  • Registration Plate: 2019/19
  • Mileage: 12,000 miles
  • Glass’s Trade £10,500 Excl VAT
  • Glass’s Retail £11,950 Excl VAT

Monthly Market Dashboard: RVs have peaked in Europe

In the second edition of a new monthly initiative, Autovista Group has created a dashboard showcasing the latest data on residual values, average selling days, the fastest-selling used cars and the residual-value outlook in France, Germany, Italy, Spain and the UK. Senior data journalist Neil King discusses the findings.

Autovista Group’s new interactive monthly market dashboard (MMD) reveals that the average residual value (RV) of cars aged 36 months and with 60,000km grew year on year in all the Big 5 European markets in November. However, there are clear signs that RVs have now peaked, with values lower than reported for October in all countries except France, which reported month-on-month pricing growth of just 0.1%.

RV retention, represented as RV%, grew year on year in all markets except Germany. The highest growth in RV% terms was in the UK, where the average RV% was 47%, equating to a healthy 15.1% change compared to November 2019. Nevertheless, even residual values in the UK were lower than in October in both value and retention terms.

MMD Nov 2020

The UK has enjoyed the strongest rally in used-car prices since Europe emerged from lockdowns. This was driven by the release of pent-up demand, and a starker vehicle-supply challenge than any other market, which translated into higher RVs as used-car demand outstripped supply.

However, as reported in our latest coverage of the ‘three-speed’ development of RVs across Europe, RVs in the UK have been descending from their great height since late October as pent-up demand is broadly satisfied and new-car supply has improved. With England back in lockdown until early December, and the Brexit transition period ending on 31 December, a further descent is expected as the year-end approaches. ‘With the new lockdown, it is likely that RVs will continue to fall from their high 2020 position back to where we forecast,’ commented Anthony Machin, head of content and product at Glass’s.

Rapid rehoming

In addition to the growth in RVs in most markets during November, three-year-old cars are also selling quicker than a year ago in all the major European markets, except Spain. Three-year-old cars are selling the quickest in the UK, moving on after an average of less than 34 days. However, the greatest reduction in the average number of days for 36-month-old cars to sell, compared to November 2019, was in France. These vehicles now have to wait on average only 35 days to find a new buyer in France, sitting idle for a significant 22% fewer days than in November 2019.

The three fastest-selling models in France in November 2020 were all Audi models. The A6 took just 11 days to find a new home and the A5 and A4 both sold after about 15 days on average. Following the Audi trinity, the fastest-selling model across the major European markets was the Volvo XC90 in Italy, which took only 17 days to be rehomed in November.

RVs go into reverse

The new MMD also features the latest Autovista Group RV outlook for the major European markets. The new downward trend for RVs is unfortunately forecast to continue in 2021, with prices of used cars in the 36 month/60,000km scenario going into reverse in all the Big 5 European markets. In the November update, the RV outlook for Spain and Germany was subtly revised. Crucially, used-car prices are now also forecast to decline in Germany in 2021, albeit by only 0.7%. The weakest outlook is for Italy, where RVs are currently forecast to be 3.9% lower by the end of 2021 than at the beginning of the year.

Click here or on the screenshot above to view the monthly market dashboard for November 2020.

Podcast: Used cars and ICE bans as manufacturers get smart

The Autovista Group Daily Brief team discusses the latest used-car figures from around Europe and the implications of internal combustion engine bans, as manufacturers establish smart-city projects to develop sustainable infrastructures…

https://soundcloud.com/autovistagroup/used-cars-and-ice-bans-as-manufacturers-get-smart

You can listen and subscribe to receive podcasts direct to your mobile device, or browse through previous episodes, on Apple, Spotify, Google Podcasts and search for Autovista Group Podcast on Amazon Music.

Launch Report: Mazda MX-30

The new Mazda MX-30 has an innovative crossover style that is between a compact SUV and a coupe, with design elements such as rear-hinged doors, sharp-edged wheel arches, rear lights inspired by the MX-5 roadster, and a swooping roofline.

The modern, high-quality interior features a minimalist and well-finished dashboard, and standard equipment is comprehensive, including LED headlamps, satnav, and a head-up display. With a complete list of advanced driver-assistance systems (ADAS), safety is a strength of the MX-30, which has recently been awarded five stars by Euro NCAP.

The MX-30 charges to full battery capacity in good time, but the range of about 200km (WLTP) is relatively low, even compared to other models that are not fully charged. However, the purpose of the MX-30 is to present an eco-friendly vehicle, and the battery was selected as it has a lower impact on the environment in terms of CO2 emissions during production, as well as energy consumption. There are currently no versions with extended battery capacity, but space in the engine compartment supports rumours of a range-extender variant with an additional rotary-style engine.

List prices are typically slightly lower than for C-SUV rivals but higher than for electric hatchback models. In Germany, the €9,000 incentive for battery-electric vehicles (BEVs) gives an adjusted retail price from about €23,000, which is even on a par with the petrol-powered Mazda CX-30 C-SUV.

Click here or on the image below to read Autovista Group’s benchmarking of the Mazda MX-30 in France, Germany, Italy, Spain and the UK.

We present new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Mazda MX-30 Launch Report

Used-car transactions grow in France and Germany in October

Autovista Group senior data journalist Neil King considers the latest used-car market volumes published by the respective associations in the major European markets.

The volume of used-car transactions grew year-on-year in October 2020 in France and Germany. Used-car sales increased by 11.4% and 2.6% year-on-year respectively in France and Germany in the month, and Spain and Italy only suffered modest respective declines of 1.6% and 5.7%. Through to October, the used-car markets of France and Germany had single-digit declines, of 4.1% and 3.5% respectively, whereas there were double-digit contractions in the used-car markets of Italy and Spain.

Used-car transactions, year-on-year % change, October and year-to-date

Used-car transactions, y-o-y % change graph, October and ytd 2020

Sources: Sources: CCFA, KBA, ANFIA, GANVAM/IEA

In the UK, used-car sales data are not yet available for October, but the country’s used-car market contracted by 17.5% year-on-year in the first three quarters of 2020. The volume of used-car transactions declined in all the four tracked major continental European markets too, but the downturns were significantly less dramatic than the contractions in new-car registrations.

Used-car transactions and new-car registrations, year-on-year % change, Q1-Q3

Used-car transactions and new-car registrations, y-o-y % change, Q1-Q3 October 2020

Sources: CCFA, KBA, ANFIA, ANFAC, GANVAM/IEA, SMMT

The used-car market in the UK contracted by 17.5% in the first three quarters of 2020, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT) on 10 November. However, this is only about half the downturn in new-car registrations in the country in the same period.

Following a comparatively modest decline of 8.3% in the first quarter of 2020, as the coronavirus (COVID-19) lockdown from mid-March negated growth in January and February, there was a 48.9% slump in the second quarter as dealer forecourts remained closed for most of this period.

UK busiest quarter since 2016

The used-car market rebounded to increase by 4.4% in Q3 as dealers reopened and lockdown measures were relaxed. ‘During the busiest quarter since the end of 2016, some 2,168,599 transactions took place between July and September, 92,217 more than the same period in 2019, with September recording the largest growth, up 6.3%,’ the SMMT reports.

However, as England has returned to a state of lockdown and the rest of the UK wrestles with stark rises in COVID-19 cases, the final quarter of 2020 will be challenging.

‘It is encouraging to see used-car sales returned to growth but, as the pandemic continues and outlets in many areas are being made to close again, the short-term outlook is less positive. Given these premises are often proven to be COVID-secure, we need them to reopen quickly to protect vital jobs and ensure no further delay to the fleet renewal necessary to deliver environmental improvements,’ commented Mike Hawes, SMMT chief executive.

Continental contractions

There have been similar contractions of the used-car markets in Spain and Italy. The latter has suffered the most, with 17.3% fewer changes of ownership in the first 10 months of 2020 than a year earlier, according to the latest data published by ANFIA. Nevertheless, this compares to a 30.9% contraction of the new-car market and is a significant improvement on the 31.6% decline in used-car transactions in the first half of 2020. Many buyers of both new and used cars decided to hold off until government incentives came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). This new scheme came on top of the Ecobonus scheme, which incentivises cars producing less than 20g of CO2/km.

Used-car sales fell 14.2% year-on-year in Spain in the first 10 months of 2020, according to the Spanish car dealers’ association GANVAM. This compares to a 36.8% decline in new-car registrations. As in Italy, the used-car market has recovered well, given that there were 31.7% fewer used-car transactions in the first half of 2020 than a year earlier.

However, the market turned negative in October after five months of growth. ‘This change in trend is marked, to a large extent, by the impact that the coronavirus crisis is having on operations with used cars from rental fleets, known as buybacks (since after about six months the brand has an agreement to buy back that fleet to sell it on the second-hand market). As a consequence of the fall in tourism, the car-rental companies are not renewing their fleets. In fact, registrations in this channel accumulated a drop of 60% until October and, therefore, there is a large vacuum in the supply of pre-owned used vehicles, which translates into a 34% drop in sales of second-hand models aged less than a year,’ GANVAM reports.

In France, industry association CCFA reports a modest 4.1% decline in used-car sales in the first 10 months of 2020. As elsewhere, this is a significantly better performance than the 26.9% fall in new-car registrations.

However, Germany’s used-car market has weathered the COVID-19 storm better than all the other major European countries. There were only 3.5% fewer changes of ownership in the first 10 months of 2020 compared to the same period last year, according to the industry association KBA. New-car registrations have also suffered less than in the other major markets, but were still down 23.4% in the year-to-date, therefore being outperformed by used-car demand here too.

Residual-value recovery

As Europe’s used-car markets have proven more resilient than new-car markets throughout 2020, the impact on residual values (RVs) has been predominantly positive. Autovista Group’s COVID-19 tracker, which tracks 12 European markets, shows that the index of RVs, compared to early February, has returned to pre-crisis levels in all countries except Portugal and Finland. The measurements began in February, with an index value of 100.

Residual-value index of used cars, 2 February to 15 November

RV index of used cars, 2 February to 15 November 2020

Source: Autovista Group, Residual Value Intelligence, COVID-19 tracker

However, as Europe battles a second wave of COVID-19, new lockdowns, growing stock volumes, incentives for new cars, and rising unemployment, Autovista Group expects a downward trend for the end of the year, especially for younger cars.

Further details on the Autovista Group outlook for residual values are published in the November update of the Autovista Group whitepaper; How will COVID-19 shape used-car markets?

Used Car Market Update November 2020

Used Car Auction Wholesale Market

The UK used car auction market cooled a little in October. The performance was still good, but the three key measures of First Time Conversion, Percentage of Original Cost New, and Sales Volume were all slightly lower than in September. Sales volume was once again higher than the same month last year, while the percentage of cost new also exceeded that achieved in October 2019, up 4% even though the average age of the cars sold was only 2 months lower (84.2 months in October 2020 versus 86.2 months in 2019). The first time conversion rate was down from September’s 85.0% to 80.1%, although that is still a respectable result given the ongoing challenges.

Used car market first time conversion rate graph November 2020
used car market original cost new graph November 2020
Used car market sales volume index graph November 2020

Glass’s Editorial team observed that buyers became more selective during September and this trend continued into October. In that respect the October market appeared to be back to “business as usual”, with desirable cars – good condition and specification – selling relatively quickly and achieving stronger values, with cars of lower grading and specification struggling to make credible values, or in some cases even attract bids.

With this in mind, vendors must present cars at the highest standard. This means documents, keys and, where appropriate, charging cables must be present at the sale. The latter is very important even with the current relatively low volume of plug-in cars, as the significant cost of replacement cables means their absence directly impacts values achieved at auction.

Today, with purely online sales, vendor “presence” is incredibly important to maintain buyer participation in auctions. It is easy for buyers to follow more than one auction simultaneously, regardless of location. Therefore, to maintain sale momentum, a vendor who makes quick decisions on bidding and provisional sales creates a more animated sale with more enthusiastic bidding. This is because buyers know immediately what they have bought and as a result what they still need to look for.

The Glass’s Editorial team continue to monitor auctions remotely. The majority of UK auctions are currently held online and the data shows that buyers have transitioned to this new way of working quickly.

Used Car Retail Market

October’s used car retail market reflected the auction market and continued to follow the trends seen in September. The number of used retail sales declined 6% compared with September and saw a 16.2% decline versus October 2019. However, the average sale price continued to rise, up 1.5% over the previous month and 7.5% versus October 2019. These increases in the average sale price are particularly notable given the average age of retail used cars sold in October was 48.6 months, compared with 47.5 months in September and 39.4 months in October last year.

Used car market retail observations graph November 2020
Used car market average sale price graph November 2020

Glass’s Live Retail pricing tool measures the length of time a car spends on the retail forecourt. The average 35.4 days for October saw cars selling 2.3 days faster than the September average of 37.7 days and 3.5 days faster than October 2019. The is the fastest average sale time of the past two years. Additionally, the average discount required to achieve the sales in October was 1.8%, also much lower than the 3.0% recorded for October 2019. This increases the picture of a relatively healthy used car retail market in October 2020.

Used car market average days to sell graph November 2020

Next Month

October proved to be a relatively good month for both the wholesale and retail used car markets. The Welsh lockdown for the latter half of the month did not appear to have a notable adverse effect on the national market figures – September’s trends continued into October and the overall results were good.

However, with England in lockdown for much of November, it is reasonable to expect a reduction in performance for the key metrics. The English Lockdown-2 is not as restrictive as the one earlier in the year, and many car sales outlets are prepared for it this time around with ‘Click and Collect’ available in many locations. Overall, the effect on November’s sales will not be as pronounced as the fall in sales during Lockdown-1. However, auction values and sales volumes will be impacted, with early reports from the markets supporting this theory.

The Van’s Headlights: Ford Transit Connect

The Van’s Headlights

The current strength of the used LCV wholesale market is undeniable. The number of vehicles sold is up 26.7% on this time last year, whilst used LCV values are also up 22.8% over the same period. At the auctions, 88.5% of vehicles, sold at the first time of asking.

Vehicle production is still not back to pre-pandemic levels. With the lack of supply, there is a diminishing level of stock at dealerships. This has led to fewer de-fleets, with many fleets choosing to extend leases. This is resulting in a surge in demand for used light commercial vehicles (LCVs), especially with the UK population shifting consumer shopping activity from the high street to online retail.

In this month’s edition of The Van’s Headlights, the team consider the merits of the Ford Transit Connect Limited 240 1.5EcoBlue 120PS s/s Euro 6 L2 van (2018 – ).

2018 Ford transit connect limited L2 front side view

The Ford Transit Connect

Developed by Ford of Europe, the Ford Transit Connect van range launched in 2002. Replacing the Ford Escort Van and Ford Courier van ranges which ceased production the same year, the Connect has been in constant production ever since.

Initially built on the C170 Ford Focus platform and assembled in Gölcük, near Kocaeli, Turkey by Otosan, an automotive manufacturing company owned equally by Ford and Koç Holdings AS.

Originally available as a 4,278mm short-wheelbase (SWB) and 4,555mm long-wheelbase (LWB) van, the Transit Connect was offered with the following drivetrains

  • 1.8-litre petrol
  • LPG/Bi-fuel conversion,
  • 1.8TDdi diesel with a 75PS output.

From 2005, a more refined and powerful 1.8TDCi common rail diesel engine with 90PS was added to the range. L and LX trim levels were available at launch in the UK and were supported by a 3-year/60,000 mile warranty. In the second half of 2006, a more powerful 110PS diesel variant was added to the range.

To enhance the appeal, the Transit Connect was given a mid-cycle facelift in 2009, with a higher level of specification. Externally, a new deeper set front bumper and grille were added, whilst a new dashboard was incorporated in the cabin. At the same time, the Connect launched in North America immediately winning the ‘North American Truck of the Year 2010’. A Sport van was introduced in the UK in 2011, along with the short-lived Connect Electric van converted by Azure Dynamics.

The second generation of the Ford Transit Connect launched in 2013. Again built in Turkey, it was available with a Euro 6 compliant EcoBoost 1.0-litre petrol engine or Euro 5 compliant 1.6-litre diesel engine, with outputs of 75PS, 95PS or 115PS. To appeal to a greater audience, the Connect was made available in four different trim levels, Base, Trend, Limited and Sport. Two lengths were again available, with a ‘Double Cab-In-Van’ also part of the range.

A fully Euro 6 compliant 1.5TDCi diesel engine was introduced during the first quarter of 2016. As part of this launch, Ford added a new 8-speed PowerShift automatic transmission to the range with outputs of 100PS and 120PS.

A mid-cycle facelift was introduced in 2018, incorporating the latest Ford design DNA. A three-bar grille, slimmer headlamps, a more aerodynamic lower fascia and front spoiler gave a fresh new look. Additionally, an all-new 1.5-litre EcoBlue diesel engine was introduced with outputs of 75PS, 100PS and 120PS. A comprehensive range of driver assistance features including an Intelligent Speed Limiter with automatic vehicle speed adjustment to remain within maximum legal limits, Pre-Collision Assist with Pedestrian Detection emergency braking system, Side Wind Stabilisation, Active Park Assist and Ford’s Sync 3 voice and navigation system were also introduced.

In late 2019 a Euro 6d-Temp range launched, followed in October this year with the launch of fully compliant WLTP Transit Connect models. The range was enhanced further at this time with the launch of the all-new Active and MS-RT trim levels.

Something for everyone

Andy Picton, Glass’s Chief Commercial Vehicle Editor recommends the Ford Transit Connect as “the ‘go-to’ van for thousands of operators in the UK. This extremely capable light van is offered in two lengths as a panel van and a Double Cab-In-Van. Multiple trim specifications and engine outputs make it an ideal proposition for both fleets and sole traders alike.”

Andy added, “The Connect operates in a congested market sector, but benefits from a loyal following in both the new and used market, with buyers attracted to its strong brand and competitive pricing. Buyers of a Transit Connect also benefit from Ford’s strong Transit dealer network”.

Ford Transit Connect Limited 240 1.5EcoBlue 120PS s/s Euro 6 L2 van (2018 – )

The Ford Transit Connect range

  • Petrol and diesel engines
  • One body style
  • Two lengths
  • Panel van and Double Cab-In-Van
  • 6-speed manual transmission and 8-speed automatic gearbox
  • Four trim levels – Leader, Trend, Limited and Sport
  • Euro 6 engine line up

A high level of standard specification featured in the Transit Connect and included a reach and rake steering wheel, DAB radio with USB and Bluetooth, ABS brakes with electronic brake-force distribution (EBD), Hill Start Assist, drivers airbag, 16” steel wheels, slimline full steel bulkhead (van only), immobiliser, remote central/double locking, auto start/stop and EcoSelect function.

2018 Ford transit connect limited interior

Additionally, the recommended 2018 Transit Connect Limited 240 L2 model added a plethora of additional equipment as standard. This included; front fog lights, 16” alloy wheels, body-coloured front and rear bumpers, side mouldings, wing mirrors and handles, drivers 8-way adjustable seat, heated drivers and passenger seat, electric, heated and folding wing mirrors, DAB radio with USB, Bluetooth and 4.2” TFT screen,  Quickclear heated windscreen, electric front windows, manual air conditioning, leather steering wheel, rear parking sensors, cruise control, auto wipers and headlamps, adjustable speed limiter, keyless start, second remote key and perimeter alarm.

2018 Ford transit connect limited L2 van
Ford transit connect dimensions table
2018 Ford Transit connect pros and cons table

Glass’s recommendation

Ford Transit Connect Limited 240 1.5EcoBlue 120PS s/s Euro 6 L2 van

Registration Plate: 2018/18

Mileage: 31,000 miles

Glass’s Trade £12,600 Excl VAT

Glass’s Retail £13,750 Excl VAT

EU new-car registrations declined 7.8% in October

Autovista Group senior data journalist Neil King explores the latest figures released by the European Automobile Manufacturers’ Association (ACEA) as second-wave lockdowns bring more downturns.

New-car registrations in the EU declined 7.8% year-on-year in October.  Volumes fell from 1,034,669 units to 953,615. This marks a return to the market contractions suffered every month in 2020, except for the modest growth in September. The decline is an improvement on the dramatic double-digit declines suffered in March to June, and again in August, but does not bode well as the region contends with a second wave of coronavirus (COVID-19) cases and lockdowns.

EU new-car registrations, year-on-year % change, January to October 2020 and year-to-date (YTD)

EU new car regs

Source: ACEA

All EU new-car markets contracted last month – apart from Ireland and Romania, which enjoyed year-on-year growth of 5.4% and 17.6% respectively. This renewed EU-wide downturn was to be expected given the year-on-year declines already reported in France, Italy, Spain, and even Germany in October.

Single-digit declines were reported in France, Germany and Italy, although the decline in Italy was just 0.2% and the result would have been positive (up by about 4%) had there not been one less working day. This follows the 9.5% growth in new-car registrations in September, due to the new government incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). While the market still contracted in that month, demand improved but delivery times delayed many registrations until September and October.

On a less positive note, there was a double-digit decline of new-car registrations in Spain in October. The MOVES II and RENOVE schemes were introduced in July, and the new-car market saw a 1.1% increase in the month. Since then, however, there have been respective monthly declines of 10.1% and 13.5% in August and September, and now 21.0% in October. It is therefore clear that weak underlying consumer demand is the problem in the country. Measures to deal with the second wave of COVID-19 infections, and the calculation of the registration tax based on WLTP emissions figures from January 2021, are further complicating the recovery.

New-car registrations, year-on-year % change, October 2020 and year-to-date (YTD) 2020

New-car registrations, year-on-year % change, October 2020 and year-to-date graph

Source: ACEA

In the smaller EU member states, year-on-year contractions of more than 20% were reported in seven markets, including Finland, Slovakia and Slovenia. However, some markets were far more resilient, with downturns of less than 5% reported in Austria and Hungary.

Lockdown negativity replaces pent-up positivity

In the first 10 months of 2020, registrations of new cars in the EU fell by 26.8%. Even the market downturn in October continued the improvement in the year-to-date contractions, which bottomed out at 41.5% in the first five months of the year. The greatest loss among the major EU markets was in Spain, which has contracted by 36.8% in the year-to-date, ahead of only Croatia (down 43.5%) and Portugal (down 37.1%).

As the positive contribution of pent-up demand is ultimately exhausted, the second wave of COVID-19 infections, the severity, duration and geographic spread of lockdowns, and the economic fallout of COVID-19, will define how new-car markets perform in the remainder of 2020 and beyond. The key to recovery revolves around countries agreeing budgets for 2021, and improving economic certainty and consumer confidence to boost spending. The allocation of aid resources provided by the European Recovery Fund, agreed on 21 July, will also play a pivotal role in shaping the forward outlook for Europe’s new-car markets.

Manufacturer performance

Among the leading European carmakers, the BWW Group, Ford, Mazda, Mitsubishi and Nissan all registered more than 10% fewer new cars in the EU in October 2020 than in October 2019. Mazda suffered the greatest loss, with EU registrations down 38.0% year-on-year.

Fiat Chrysler Automobiles (FCA) and the Renault Group, however, managed to register 3.9% and 0.2% more cars respectively in the EU than in October 2019. All other major manufacturers suffered single-digit declines of between 6.2% (Honda) and 9.7% (Jaguar Land Rover) in the month.

Across Europe, manufacturers with a strong electric-vehicle portfolio are expected to perform better than those without as electrically-chargeable vehicle (EV) consumers are less likely to be tempted by used cars instead of new. This is because they tend to be less price-sensitive buyers, but there is also limited availability of the latest electric models on the used-car market. In the year-to-date, Toyota is the best-performing manufacturer in the EU, albeit with registrations down 16.9%, supporting this hypothesis.

In a new video, Autovista Group Daily Brief editor Phil Curry talks through the latest registration figures in the big four EU markets and the UK.

Will the automotive industry surf the renovation wave?

The European Commission published a new clean-energy strategy in October, aimed specifically at upgrading buildings. But the automotive industry has its part to play in the strategy. Will it surf this renovation wave, or will it be left adrift? To find out, Autovista Group Daily Brief journalist Tom Geggus, spoke with electricity industry association, Eurelectric.

Henning Hader
Henning Hader – Eurelectric

‘The renovation wave is a very necessary and a very timely initiative from the European Commission to tackle what is basically one of the largest remaining challenges in decarbonising the European economy, and that is buildings,’ explained Henning Hader, policy director at Eurelectric.

However, the wave is not focused solely on how efficiently a building uses energy, during heating or cooling for example. This process is just as much about future-proofing buildings for developments in smart technology, integration into digital infrastructure, and most importantly for the automotive industry, connection to advanced charging points.

Automotive application

‘The automotive sector is impacted across the entire value chain with this transformation,’ Hader emphasised. ‘They are being put under pressure, and rightly so, to come with products that are decarbonised, that enable people to switch to clean-energy carriers, using cars.’ This includes zero- and low-emission vehicles with electrified powertrains, i.e. battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs).

In order to fully commit to decarbonisation, there must be enough demand for electrically-rechargeable vehicles (EVs). In the wake of coronavirus (COVID-19), governments are pushing incentive schemes to help the automotive industry make a green recovery, but these vehicles require charging and cannot exist in an infrastructure vacuum.

‘We know that cars are parked for 90 to 95% of their life, and 90% of that time they are parked at home or at work, in buildings, around buildings, under buildings, on top of buildings,’ said Hader. ‘So, what is important, is that chargers on private property, do not just appear out of nowhere. They have to be purchased and installed by the people who operate these buildings.’

This is where the renovation wave sweeps in, helping develop regulations, shaping what an updated structure should look like. Therefore, owners and operators of buildings need to be familiar with the opportunities this presents and even, ideally, be incentivised to anticipate this, allowing them to equip essential infrastructure.

The issue of availability

‘One of the biggest issues is the availability of charging points. We have lots of promising announcements about how the number of charging points is increasing, but most of those are public charging points,’ Hader stressed. The opportunity to install EV infrastructure has to be taken during a building’s renovation, even if the actual recharging system is not installed straight away. If the policy exists, all private and public properties would all be equipped for an upgrade, removing the potential for expensive retroactive installations.

‘These chargers enable us and our system operators, specifically distribution system operators, to take on all these cars that are charging in different areas, and when they are on smart chargers, they can become a flexibility source of the future,’ Hader explained.

This will be vital as cars adapt charging schedules, and even, under the right circumstances, feed into the grid. ‘There is an entire world of flexibility and efficiency that opens up if we make sure that renovating a building is about more than just insulation,’ he said. ‘It really is about getting the buildings to become a building block in the future energy system, where the buildings, the cars on those buildings and the people in these buildings, become very important flexibility providers.’ But, in order for this to happen, some current policies will require renovation.

Renewable energy directive

At its core, the EU’s renewable energy directive (RED) acts as a foundational policy for the production and promotion of energy from renewable sources. ‘There are elements in the renewable energy directive that are very relevant for electrification, and for electricity being used in transport, for example,’ Hader said. But, as part of the European Green Deal, this legislation, alongside the energy efficiency directive, is under review. Renewable-energy targets will be assessed, as well as other parts of the directive to fall in line with the Climate Target Plan for 2030. The results of the review and any accompanying proposals are expected in June 2021.

‘In order for the power sector to supply enough clean electricity to electrify the sectors that should be electrified, so, economically speaking, large parts of personalised passenger transport, heating to a large extent, some industrial processes, we will need to have a lot more capacity, specifically, of course, renewable capacity, because we want to fully decarbonise our sector’ he explained.

Therefore, RED will need to accelerate capacity rollout, particularly as it plays a fundamental role in helping build investor confidence in renewables. ‘In order to meet the new ambitious targets for 2030, and to decarbonise the power sector and to electrify large parts of society at the same time, we need more, we simply need more’ Hader said. Eurelectric’s Power Barometer reflects the developments the power sector is undergoing, as well as the challenges which lie ahead.

https://infogram.com/power-barometer-2020-1hmr6gq78p1o2nl

Source: Eurelectric

Knowledge is key

So, what barriers stand in the way of an automotive renovation wave? A chief issue to overcome is making sure both building owners and industry experts are aware of the new technological possibilities. This means supplying information across the renovation chain.

Proprietors need to be aware of the infrastructure potential, the experts offering advice to them must understand what technological and funding opportunities exist, and those carrying out the renovation work must have the practical skills to set up the technology. In this way, all necessary regulations can be adhered to, incentives taken advantage of, and infrastructure either installed or the framework set up for it.

This approach could help combat the rollout of soon-to-be-obsolete charging systems, only installed to meet immediate demand, but without any foresight of future smart-charging systems that are capable of cross-grid communication. But why is this type of connection important when it comes to EV infrastructure?

‘Let’s say you’re in a suburb of Brussels, and there is a system constraint because a lot of demand is coming online at the same time, and there is a need for flexibility so the operator can interact and communicate with these chargers,’ Hader explained. This could allow the grid operator to switch the role of the chargers and instead feed into the grid for a few minutes, with the consent of the EV owner.

But, the future of these systems depends upon the renovations that are carried out now. Even if they only consist of some basic piping, which could one day support smart, flexible and advanced EV charging technology.

November – Latest whitepaper update: How will COVID-19 shape used-car markets?

The latest edition of Autovista Group’s whitepaper: How will COVID-19 shape used-car markets? considers the second wave of coronavirus (COVID-19) infections across Europe. Out of the 18 markets covered, 10 have adopted a more negative view of overall economic scenario outcomes.

The latest update to the Autovista Group whitepaper covers such topics as:

  • Three-speed RVs: Europe’s used-car prices recover to pre-crisis levels
  • A golden age for used-car markets?
  • The double-edged sword of EV government incentives?
  • Coronavirus scenarios – how swiftly will economies recover?

Residual-value (RV) outlooks have changed. 10 of the countries tracked have now changed to a more favourable position for RVs in 2020 as the landscape for the year becomes clearer. Eight countries have also confirmed their RV outlooks for 2021 and 2022.

However, RVs are also under threat from government-backed incentive schemes, designed to help the automotive industry following extensive lockdowns earlier this year. Such grants favour the purchase of new vehicles, and Autovista Group has analysed the impact on the used-car market in different regions, focusing on internal combustion engine (ICE) and electric-vehicle (EV) models. The latter looks to be under more pressure, especially in two markets.

The whitepaper shows that a ‘two-speed’ market recovery continues in Europe. This year has seen most used-car markets fare particularly well, even above pre-COVID levels. However, this is largely driven by a run for cheaper, older vehicles, as many come to rely less on public transport through fear of contracting COVID-19. Young used cars, including those coming off-lease or released by rental firms, do not see such a level of recovery and are under pressure in a number of markets.

Yet some markets, such as in Southern Europe, will not be at pre-crisis levels by the end of 2022. There are already signs of the need for some downward market correction before the end of this year.

You can find more information about how different markets are shaping up, and the various economic scenarios across the region, in the latest update of the Autovista Group whitepaper – ‘How will COVID-19 shape used car markets’ – which can be viewed here.

LCV Marketplace Update November 2020

New Light Commercial Vehicle (LCV) Market

The light commercial vehicle (LCV) market grew for the second consecutive month in October, with the 28,753 registrations the highest performing on record for October. The 13.3% increase in registrations was driven by the heavier end of the van market ahead of an expected busy delivery period in the run up to Christmas. This is in contrast to a weaker October 2019, when the market was impacted by supply challenges linked to the introduction of WLTP compliant LCVs.

The second countrywide lockdown, social distancing measures, redundancies, Brexit and possible vehicle tariffs will all affect LCV demand for the remainder of this year and well into next year.

New LCV registrations graph November 2020

Year-to-date registrations to the of October have declined by 24.1%, with 236,833 units hitting UK roads (311,989 units – 2019). Breaking the month down by sectors reveals that registrations for pickups declined by a disappointing 31.8%, whilst vans under 2.0 tonnes, vans between 2.0-2.5 tonnes and vans between 2.5-3.5 tonnes increased by 1.6%, 2.9% and 26.8% respectively.

LCV top 5 registrations table November 2020

The quarter four SMMT LCV registration forecast for 2020 has just been issued and surprisingly shows an increase of 6.6% to 288,000 units. With a current shortfall of over 50,000 units, lead in delays on new stock, a shortage of vehicles at dealer level and two months left of the year, the new predictions would seem a tall order to achieve.

Moving into November, UK registrations remain over 24% down on the same point last year. The pandemic with the second English lockdown continues to seriously affect many businesses. Although September and October registrations were welcome boosts to the economy, it will take an exceptional boost to achieve the latest SMMT forecast.

The interconnected nature of the UK economy means that the demands of the latest lockdown and Brexit will bring opportunities and challenges in equal measure during the coming months.

October Used Light Commercial Vehicle (LCV) Overview

Performance in the LCV auction market remained exceptional in October with buyers exchanging high bids for retail-ready stock. The continuing stock shortages across all ages and sectors, driven by fleet extensions and increased rental demand, means vendors are currently in a very strong position. In the retail market, dealers are enjoying healthy profits as prices continue to rise. There is no change on the horizon, as prices look set to remain high for some time.

Euro 6 stock made up nearly 40% of all LCVs sold at auction during October, with an 88.9% first-time conversion rate. Much of this stock continues to support the increasing demand for home deliveries during the second lockdown and the run-up to Christmas.

The sustained appetite for retail-ready stock shows no sign of abating. Auction houses have adapted quickly during the pandemic, moving their business models online. Whilst dealers and traders, who historically attended physical sales to ‘touch the metal’, now buy online with confidence. In return, many dealers are offering retail customers ‘click and collect’ online services adhering to current government guidelines.

October in detail

Glass’s auction data results show the overall number of LCV sales in October fell by 8.4% versus September 2020 and were down 2.0% versus October 2019. First-time conversions were up 2.5% on September to 89.9% – the second-highest level in the last twelve months – and up 4.3% versus October 2019.

Since March this year, average sales prices have risen 33.6%, with October 4.5% up on September and 36.3% up on the same point last year. October prices were at the highest level for the last twelve months. The average age of sold stock rose from 69.7 months in September to 72.4 months in October, whilst this figure was 0.7 months lower than the same point last year.

In line with this older vehicle age profile, average mileages for those vehicles sold increased from 70,457 miles in September to 73,438 miles in October. Remarkably, the October average mileage is nearly 7,250 miles lower than at the same point last year.

Glass’s continues to monitor the LCV market closely and has an open dialogue with auction houses and manufacturers, leasing and rental companies, independent traders and dealers as well as the main industry bodies. This information, combined with the wealth of knowledge in our CV team ensures Glass’s valuations remain relevant in the market place.

New Car Market Update October 2020

Following September, new car registrations in October had a relatively low bar to clear to eclipse last year’s total, due to the WLTP emissions testing challenges faced in 2019.  However, once again registrations failed to match last year’s figure coming in 1.6% lower at 140,945, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT). This was the lowest October total for nine years and over 10% lower than the average October total over the last decade.

There was potential for an uptick in October, but with the Welsh lockdown towards the end of the month hitting registrations in the region by up to 25%, any momentum fizzled out. On a positive note, October was the least-worse month-on-month comparison versus 2019 (see chart below). The year to date registration total is now down 31%.

Total new car registrations monthly graph November 2020

Data courtesy of SMMT

Pure petrol cars saw a 21.3% reduction while diesel fell a significant 38.4% and accounted for just 14.9% of the new car market in October. However, large increases in mild-hybrid (MHEV) models mitigate these figures as they jumped significantly compared to last October, with petrol MHEV up 545.8% and Diesel MHEV up 56.6%. This shift has played out all year as shown in the year-to-date chart below, as car manufacturers continue to reduce CO2 outputs using mild-hybrid technologies.

New car market fuel type ytd % change graph November 2020

Data courtesy of SMMT

Despite the year’s very low total registration figure, the bright spot continues to be alternative fuel vehicles, especially Battery Electric Vehicles (BEVs). With the registration total of BEVs almost trebling in October compared to last year. The adoption of BEVs is higher in the fleet market, with 43,146 cars registered year-to-date compared to the private market at 26,682. Benefit in kind (BIK) taxation benefits and product confidence make the BEV proposition more compelling to company car users. For private retail customers, the lack of taxation savings, higher list prices (versus internal combustion engine vehicles), lack of knowledge of both longer driving ranges and the potential for the total cost of ownership savings, makes the BEV purchase proposition more difficult for private consumers with the increased upfront financial burden.

Three-speed RVs: Europe’s used-car prices return to pre-crisis levels

Following the emergence of Europe’s automotive sector from coronavirus (COVID-19) lockdowns, a ‘three-speed’ development of residual values (RVs) has prevailed across the region. Senior data journalist Neil King explores the latest developments.

Autovista Group’s COVID-19 tracker, which tracks 12 European markets, shows that the index of RVs, compared to early February, is back above pre-crisis levels in all countries except Portugal and Finland. The measurements began in February, with an index value of 100.

The UK has enjoyed the strongest rally in used-car prices, driven by the release of pent-up demand, both from the lockdown and the uncertainty running up to the country’s departure from the European Union on 31 January. The UK also faced a starker vehicle-supply challenge than any other market, which translated into higher RVs as used-car demand outstripped supply. Values rose from mid-May and peaked at 106.0 (a 6.0% rise) in the week to 11 October.

However, RVs have since fallen from this great height as pent-up demand is increasingly satisfied and supply improves. In the latest week for which data are available, to 8 November, the index has receded to 105.0 (a 5.0% rise) and a further downturn is expected as the year-end approaches, which also marks the end of the Brexit transition period. ‘With the new lockdown, it is likely that RVs will continue to fall from their high 2020 position back to where we forecast,’ added Anthony Machin, head of content and product at Glass’s.

French resistance

France benefitted from pent-up demand and a new incentive scheme that came into effect on 1 June. The €8 billion package includes a €7,000 grant for private buyers of new battery-electric vehicles (BEVs) costing less than €45,000 (€5,000 for fleet buyers), while buyers of new plug-in hybrids (PHEVs) can claim a €2,000 subsidy.

Additionally, France doubled its premiums for those looking to trade in older vehicles for a cleaner model, with a €3,000 grant for vehicles with internal combustion engines (ICE) and €5,000 for BEVs and PHEVs. Crucially, the enhanced trade-in bonus also applied to used cars and hence the notable rise in RVs. However, the scheme reached its 200,000-vehicle cap before the end of July and the Ministry of Ecological Transition announced the replacement of the recovery scheme with a conversion bonus, applicable from 3 August. This has translated into stagnation in the development of RVs in France since the end of August, with the index barely rising from 102 to 102.8 in the week to 8 November, falling to third place behind Poland in the process.

Autovista Group anticipates a slowdown in the RV development in France and our latest RV outlook expects prices of used cars to be 0.3% lower in France at the end of 2020 than when the COVID-19 crisis erupted in Europe, in March. ‘A lack of supply has created the RV jump, but OEM plants are now working at, or close to, 100% capacity in France. So, this should no longer be the case and hence this circumstantial jump should decrease by the end of the year. Considering the 2021 malus [tax penalty], people could advance purchases but we have not changed the outlook right now,’ commented Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.

Residual-value index of used cars in European markets, 2 February to 8 November 2020

Residual-value index of used cars in European markets, 2 February - 8 November 2020

Source: Autovista Group, Residual Value Intelligence, COVID-19 tracker

Rapid-reaction markets

Sweden, Finland and Portugal all had rapid negative reactions to COVID-19. Dramatic lockdown measures were not introduced in Sweden and Finland, but RVs fell from early February to mid-May in both markets.

RVs have climbed in Sweden since mid-May and recorded 102.3 on the index in the week to 8 November, i.e. 2.3% higher than in early February. In Finland, the index of RVs fell from early February to only 97 in mid-June but have recovered slowly and remain at the lowest level in Europe, registering 99.2 on the index in the week to 8 November (0.8% lower than in early February). ‘Finland is still running on low numbers, and we don’t see the same quick recovery as in Sweden. The import of young used Swedish cars has picked up again too, in combination with lower used-car values than normal, already before the crisis started,’ explained Johan Trus, Autovista Group head of data and valuations, Nordics.

Portugal also endured falling RVs since the tracker index started in February, but a more pronounced downturn commenced at the end of March. As in Finland, the price index has only increased modestly since, to 99.3 in the week to 8 November (0.7% lower than in early February). Portugal and Finland are the only European markets where RVs have not recovered to pre-coronavirus levels.

‘Used-car values have been increasing since the end of May 2020 and almost reached pre-pandemic values at the end of October. There has been similar behaviour across all ages, with the exception of vehicles up to six months old that reached and exceeded pre-pandemic values as early as June. Used-car transactions have decreased less than new-car registrations during 2020, but there are no new incentive schemes because of the pandemic and also no new incentives from the government for 2021,’ commented Joao Areal, editorial manager of Autovista Group in Portugal.

Late starters

The rest of Europe’s tracked markets remain ‘late starters’ with broad stability in values as several effects are balancing each other out.

On the downside, most European markets essentially remain ‘on hold’ as consumers wait for a better understanding of the full impact of the COVID-19 crisis, especially with a second wave of cases and new lockdowns across the region.

In Italy, for example, RVs recovered from late July to mid-October, partly because of the incentives to support the country’s automotive industry, which came into effect on 1 August. However, values have stabilised since.

Conversely, the disruption to new-car supply and demand continues to positively impact RVs.

In Germany, for example, used-car transactions were just 3.5% lower in the first 10 months of the year than in the same period in 2019, according to the KBA. They have even performed better than last year, for five consecutive months. New-car registrations have been far more affected, however, and are still 23.4% lower in the year-to-date than in 2019.

Switzerland has also seen large declines in new-car sales volumes and so ‘nearly-new cars aged zero to six months, and used cars in general, still seem to serve as a gap-filler or alternative for new cars and therefore show improved RVs,’ explained Robert Madas, Autovista Group valuations and insights manager for Austria and Switzerland.

Meanwhile, the strongest development of RVs in recent weeks has been in Poland, where the index has overtaken France. ‘We can still observe huge demand for used vehicles, especially the youngest, as demand for new vehicles is limited due to fast-growing list prices and availability,’ commented Marcin Kardas, head of the Autovista Group editorial team in Poland.

Year-end negativity

Despite the broad stability in the development of RVs, a mixed picture of used-car demand is emerging, Moreover, as Europe battles a second wave of COVID-19, new lockdowns, growing stock volumes, incentives for new cars, and rising unemployment, Autovista Group expects a slightly negative trend for the end of the year, especially for younger cars.

‘The stable or slightly rising price levels in Germany are from my perspective a result of new entrants selling relatively quickly whereas models that are not moving on remain at badly-managed, comparably high prices. Just to clarify, there is no dealership “rising” prices, but they are being more optimistic when listing new arrivals and are “forgetting” about the older ones,’ commented Andreas Geilenbrügge, head of valuations and insights at Schwacke.

‘It looks like as if there is a growing volume share of vehicles that are collecting stock days and are not being properly handled by the dealership. The overall volume on offer is rising and stock days are at a significantly higher average level than pre-crisis, at comparable asking prices and a worse list-price relationship. This is becoming a more and more unattractive proposition for dealers and may cause a problem at the end of the year,’ Geilenbrügge added.

This cautionary sentiment was echoed by Ana Azofra, valuations and insights manager at Autovista Group in Spain. ‘Although prices remain higher than before the crisis, the trend is shifting. The cumulative drop in used-car transactions in 2020 is 14% and now, on average, prices are tending to stabilise.’

‘However, the trend is completely different depending on the age group. Even for the youngest cars, prices are starting to drop and the stock volume, which was lower than in March only a few weeks ago, is now higher. This is mainly due to car-rental companies defleeting and as they are not renewing their fleets either, this could affect the volume of the youngest cars in 2021. Furthermore, the incentive scheme is already penalising RVs, as expected,’ Azofra explained.

‘In contrast, prices of very old cars are keeping the positive evolution, both in terms of sales and prices, which is supporting the positive market average to a great extent. Firstly, the crisis is diverting demand towards cheaper cars, which favours used examples – especially older used cars. Secondly, the search for safer and more hygienic mobility has attracted some former users of public transport. In fact, the sales of these age groups especially increased in the regions where the coronavirus had (and has) a higher incidence,’ Azofra added.

The situation is a bit more optimistic than before in Spain, but the country faces the same challenges as elsewhere. Similarly, in Austria, ‘new lockdown measures have come into effect as of November, and there is uncertainty regarding purchasing power and the general economic outlook. Therefore, our RV outlook for the end of 2020 is somewhat better than before, but we expect a shift of negative effects into 2021,’ said Madas.

In Switzerland, the number of active used-car adverts has been rising slightly since the second week of October and was higher than the number of deleted used-car adverts. ‘If this trend goes on, the increasing number of used cars – together with rising dealer and/or manufacturer incentives on new cars – could stop the uplift trend for RVs in the near future,’ Madas concluded.

Further details on the Autovista Group outlook for residual values will be published in the forthcoming update of the Autovista Group whitepaper; How will COVID-19 shape used-car markets?

Click here to join our online seminar broadcast, 16 November 15.30 CET, as we present our latest update on how residual values will develop in a post-pandemic world.

Explaining October’s registration figures

In October, none of the big five European markets achieved a positive increase in registrations. With markets entering various states of lockdown to ease a second wave of coronavirus (COVID-19) infections in November, the picture for the rest of 2020 could become murkier still. Autovista Group Daily Brief editor Phil Curry guides you through the figures in the latest registrations round up.

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel. There you will find videos on a range of subjects including autonomous vehicles, new-car registrations, safety systems, and electrification.

Motorcaravan Market Update September 2020

Traditionally, at this point of the year, the motorcaravan industry would focus on the new season ahead, with dealers and manufacturers preparing for the annual October show at the Birmingham NEC. However, 2020 has been anything but traditional with COVID-19 leading to the cancellation of the show and disruption to the market. Usually demand will have reduced by now as the summer season ends. This is certainly not the case this year, as numerous contacts have told the Glass’s editorial team that the market is behaving unlike any other year.

Dealer feedback

Trading feedback from dealers over the summer months ordinarily tends to show a general consensus regarding market trends, with a varying proportion of dealers viewing things differently. This year however, every dealer that the Glass’s editorial team spoke to held the same viewpoint. Sales have been consistently strong since the physical reopening of showrooms on June 1. Additionally, many dealers have experienced record sales levels indirectly supported by the Government adding additional countries to the 14-day Covid-19 quarantine list.

The strengthening market was extremely welcome after a period of complete shut-down with many dealers believing the market will retain current demand levels for the next twelve months. The continued demand levels are even more likely if the increased demand from first time buyers continues. Dealer feedback suggests that as many as 75% of sales over the summer have been to customers who have not previously owned a motorcaravan, many of whom fall into younger age demographics than traditional motorcaravan owners.

Stock availability

Whilst the incredible demand is of course welcome, it has also caused serious issues with stock availability, which threatens further growth. A lack of both new and used units has been a growing concern since mid-June. Dealers and manufacturers have confirmed that whilst record sales numbers were being recorded, so too were record low volumes of stock. There are even dealers who fear they will completely run out of stock in the coming weeks.

High consumer demand has enabled dealers to sell unsold new units carried over from last year that they had previously struggled to sell, even with heavy discounts. However, prices have been readjusted due to this demand. Used stock advertised prices have also increased, with many dealers referring to these values as ‘COVID prices’ and it remains to be seen how long they will last.

Factory production

Dealers are concerned that there is little sign of new stock on the horizon. The majority of manufacturers have now recommenced production. However, unfortunately this is at reduced production volumes due to the Covid-19 contact protocols that are in place to protect factory workers.

The hindrances to manufacturing lines means that 2021 model year stock will not start arriving with dealers on mass until early next year, leaving them with an extended period without stock replenishment.

Used stock availability

Good quality used stock availability is low at the best of times and is almost non-existent currently. Dealers have reported to Glass’s that the stock being offered to the trade is usually at unrealistic prices, with little profit opportunity. Another factor adding to the shortage of used stock is the lack of part-exchanges generated over the summer. This is due to the increased numbers of first-time buyers entering the market.

The remainder of 2020 is going to be difficult for dealers to continue with such low stock levels. Usually at this point in the year dealers begin to be offered unwanted units from customers, allowing an opportunity to rebuild stock levels, however customers are choosing to hold onto their motorcaravans this year adding to the already dire stock position.

The market

The market appears to be at a pivotal moment. The impact of COVID-19 has resulted in a market with a fresh chance of growth through natural demand. This looked very unlikely leading up to March this year.

At the time of writing, cases of COVID-19 are rising in the UK and Europe again. This could result in fewer overseas holidays in 2021 thereby encouraging more people to staycation. This will boost demand further.

The growing stock crisis will hinder growth, however if dealers can get through a period of business slow down due to the lack of stock, then 2021 could deliver exceptional results.