Fuel Type: Diesel

Hitting the target: Lone carmakers that successfully reduced their emissions

In the second part of a three-part series on meeting CO2 emissions targets, Autovista Group senior data journalist Neil, King considers the manufacturers that successfully met their respective targets without pooling emissions.

Last year was the first step for carmakers to meet strict CO2 emissions targets. Many decided to pool with other carmakers to spread their emissions over a larger fleet size. However, several carmakers chose to go it alone.

While some may have been confident in their own fleet-average emissions, there may have been other reasons behind the decision for a few carmakers. One may have been control, having no external influence on their own numbers. Another may have been down to cost.

Pooling with other manufacturers may ensure meeting the target, but requires a financial contribution to ‘partner’ companies. This financial contribution would be a waste of finances if carmakers believe they can meet their targets alone. Looking back at those who pooled, many who instigated discussions were forced into lowering their potentially fine-inducing emissions. Others were so confident they looked to help those that were struggling.

So, to recap, from 2021, the average emissions target for new cars registered in the EU is set at 95g/km CO2. For every 1g/km of CO2 a manufacturer exceeds its average emissions target by, it is fined €95, multiplied by its volume of new-car registrations in the preceding year. However, the highest-polluting 5% of new cars registered in 2020 are excluded from the 2021 fines calculations, which serves as a transitional phase for carmakers.

While carmakers do not publicise their thoughts about pooling, two that could have considered control and finances would be Daimler and BMW. Both met their respective emissions targets independently, and had financial concerns leading up to the deadline for emissions targets.

BMW beats target

BMW had set aside around €1 billion in 2019 to pay off an expected fine for its alleged part in an emissions cartel. However, the carmaker beat its 104g/km CO2 target by 5g in 2020, reducing its new-vehicle fleet emissions by 22% compared to 2019.

‘Despite the coronavirus pandemic, we delivered about a third more electrified BMW and Mini vehicles to customers than the previous year. Our plug-in hybrids were highly sought-after, as were our new fully-electric models, the BMW iX3 and Mini Cooper SE. Because we started our preparations early, we were able to significantly overfulfil our assigned CO2 limit by about 5g/km. This was never in any doubt for us. Our EU fleet emissions are currently at 99g/km, and we will also meet the 2021 requirements,’ the company stated.

A manufacturer that had a well-documented financial slide throughout 2019 and 2020 was Daimler. Therefore, going it alone made sense, maintaining control of its figures and finances – however, it was also a risk. In 2019, Daimler reported average CO2 emissions of 137g/km, way above its individual target. It reported meeting its fleet-average emissions target of 104g/km, reducing output year-on-year by 24%.

‘On the basis of WLTP, we expect our fleet average in Europe (European Union, Norway and Iceland) to decrease again significantly in 2021 compared with the figures for the previous year. This development will be driven in particular by the rising proportion of battery-electric vehicle models and plug-in hybrids in our new-car fleet,’ the company commented.

The fact that both BMW and Daimler met their targets also shows the level of commitment the carmakers put into reducing their CO2 levels. German manufacturers heavily relied on developing diesel technology in the early part of this century, relying on them to meet CO2 emissions checks. Yet the collapse of the diesel market since 2016 has meant German companies in particular have needed to speed up the rollout of hybrid (HEV), plug-in hybrid (PHEV) and battery-electric vehicles (BEVs).

Stellantis

In the first part of this series, Autovista Group noted that Fiat Chrysler Automobiles (FCA) had pooled with Tesla and successfully reduced its emissions below its individual target. Last year’s figures do not take into account the merger between PSA Group and FCA to create Stellantis. Therefore, the French partner relied solely on figures from its Peugeot, Citroen, Opel/Vauxhall and DS marques.

PSA Group did open a pool, but it only featured those brands owned by the group. Final figures were not available, but the company clarified that it had met its targets for 2020.

‘Groupe PSA remained focused on CO2 performance and met European targets in 2020, in line with prior commitments. It complied with its CO2 objectives both on the optimisation of ranges in terms of internal combustion engine (ICE) emissions and on the growth of LEV [light-electric vehicle] sales volumes (a significant increase with 120,000 registrations in 2020),’ according to the group’s financial report for 2020 (page F-48).

PSA Group’s figures will be reported alongside FCA’s in 2021, as part of the new Stellantis business. This is also likely to affect the pool FCA runs with Tesla and Honda. The Italian side of the new business may not need to rely on the zero-emission specialist carmaker to meet its targets, which would create a dent in Tesla’s finances for this year. CEO of the new manufacturing group, Carlos Tavares, has been reported to have already terminated the agreement with Tesla.

Koreans go it alone

Korean carmakers Hyundai and Kia also managed to meet their respective emissions targets on their own in 2020, with no concern voiced in the lead-up to the deadline. ‘Hyundai’s strategy towards zero-emission mobility and the high proportion of ZEVs [zero-emission vehicles] among its new-car sales were key factors enabling the company to meet its CO2 target,’ the company stated in January.

As for Kia, significant growth in demand for hybrid and electric vehicles helped the brand reduce its emissions. Electrified powertrains accounted for one in four sales in Europe last year.

‘Throughout the pandemic, we were able to continue launching new and upgraded vehicles, and continued to electrify more of our product line-up to meet growing consumer demand for advanced powertrains,’ commented Won-Jeong (Jason) Jeong, president of Kia Europe.

The work for all these carmakers is far from over. Not only do they need to ensure their full fleets meet targets by the end of 2021, but they also need to consider stricter reductions in CO2 emissions for 2025 and 2030. This is one significant reason why the number of electrically-chargeable vehicles (EVs) being manufactured is on the rise. The speed at which they need to roll out these low and zero-emission vehicles will become clearer once the final 2021 numbers are revealed.

In the first part of this series, King focused on manufacturers that successfully pooled their emissions with smaller manufacturers to meet their respective targets. The final part will look at those who missed their targets in 2020 and how they plan to meet them by the end of this year.

The Van’s Headlights: What the future looks like

LCV Van sales – The Future

The Past

The pandemic hit the light commercial vehicle (LCV) industry like a bolt out of the blue. Production lines ground to a halt with limited volumes of new vehicles entering the country whilst the sale of used stock in the UK ceased. The first time the industry had come to a complete standstill since the Second World War.

Whilst dealerships and auction houses remained closed, there were minimal numbers of new registrations during April 2020. ‘Click and collect’ was the only way to get essential new and used LCVs to the NHS and the wider buyer base. To move items efficiently and in bulk, LCVs were needed and plenty of them. The shortage of new stock meant that there was a huge spike in demand for used LCVs, both from the wholesale market and from rental companies.

A year later and the UK is beginning to see a light at the end of a very long tunnel. The vaccination rollout has been quick and effective in easing personal restrictions. Due to lockdowns across Europe, the supply of parts to manufacturers and the production of finished vehicles, has been slow and at time intermittent. This in turn has forced fleets to retain their current fleets longer than expected, creating a shortage of used LCVs in the market.

The mainstay of used LCV supply in the UK market has always been the auction houses. Over the last twelve months, they have adapted quickly to a new way of remarketing vehicles.

Historically, it was possible to tell what day of the week it was by the auction centre you were attending. The vans would be lined up in rows and each van would be driven into the auction hall and sold physically, with the sale relayed to online buyers to bid on. Fast forward to April 2020 and the pandemic had locked down the country. No public gatherings were permitted and the sale of used LCVs had all but stopped, although demand was sky-high.

The Future

Online auctions for used LCVs started in 2002, always playing a supporting role to physical auctions. Each year, online popularity has increased and before the pandemic made up nearly 50% of all sales. The change to 100% online sales during the pandemic proved an instant success. With images and inspection reports used to support vehicle sales, the vehicles themselves no longer needed to be at the sale site. The gradual increase in online sales would have continued over the coming years if there had been no pandemic, but the restriction on movement and demand for vehicles has accelerated this change.

There are so many positives to 100% online sales:

Reduced vehicle movements at auction – better for the environment
Buyers no longer need to be at auction – better for the environment, reduction in costs
Vendor movement of vehicles to auction site eliminated – better for the environment, cost savings
Trade buyers able to view multiple online sales at the same time
More relaxed buying/selling experience
Vendor representation at most online sales – quicker decisions on bids

Understandably, some aspects of online sales will take time to adjust to as buyers fully embrace this change. These are mainly:

Buyers not being able to meet up in the halls to discuss the market
Buyers not being able to touch, see and hear the vehicles as they are driven through the hall
Not being able to assess any damage in real-time

Other important concerns, but easily remedied aspects relate to:

Inadequate or poor quality images
Incomplete mechanical inspection reports
Incorrectly described vehicles

As the UK starts to ease lockdown restrictions, the change in buying habits due to the pandemic has been noticeable. Production of new vans is struggling to keep up with demand forcing buyers into the used market. The lack of a normal supply of de-fleeted vans into the used market has meant that later year stock is at a premium. This has meant that there has been a significant upward realignment of used van values as demand continues to outstrip supply.

The used light commercial vehicle sales arena has changed and this is the future.

Carmakers successfully pooled emissions to meet 2020 EU targets

Autovista Group senior data journalist Neil King investigates the emissions performance of major carmakers in the EU in 2020. In this first part, King discusses pooling and focuses on manufacturers that successfully spread their emissions over a larger fleet average.

The issue of CO2 targets has given many carmakers a headache in recent years. Until 2016, many relied on diesel engines to help them achieve their goals. Yet, the collapse in trust and sales of this technology left manufacturers scrambling for alternatives, especially as consumers switched to the higher CO2-emitting petrol cars and SUVs.

The best option was to push ahead with plans for both hybrid and electrically-chargeable vehicles (EVs). Some carmakers were more advanced in developing these technologies, which led to several manufacturers combining their fleets into pools, spreading out CO2-emission figures over a larger area and reducing the chances of a fine.

Manufacturers established a number of pools to help meet their 2020 and 2021 targets, and all but one was successful last year. Volkswagen Group, part of the biggest pool by market share, missed its projection by a small margin, just 0.5g. However, every carmaker managed to reduce their average fleet emissions, compared to 2019.

Running the numbers

From 2021, the average emissions target for new cars registered in the EU is set at 95g/km CO2. For every 1g/km of CO2 a manufacturer exceeds its average emissions target by, it is fined €95, multiplied by its volume of new-car registrations in the preceding year.

However, the highest-polluting 5% of new cars registered in 2020 are excluded from the 2021 fines calculations, which serves as a transitional phase for carmakers. Based on analysis of data distribution, Autovista Group calculates that this reduced average CO2-emissions figures by about 7%. From 2022 onwards, however, full compliance of all new cars is required (i.e. new cars registered in 2021 onwards).

Pool party

The idea of a pool is simple. A carmaker struggling to meet targets reaches out for help to those who are more successfully managing their CO2 output. Once in the pool, both sets of emissions figures are combined and spread out over an expanded fleet, reducing the average and, in most cases, helping the struggling company achieve its target and avoid a fine. The compliant manufacturer will likely receive financial compensation for its help.

Of all the major manufacturers in Europe, Toyota was in the strongest position to meet its emissions target in 2020. Compared to their 2017 level, the Japanese group only had to reduce their average fleet emissions by 9g CO2/km (9%). The manufacturer has not revealed detailed emissions figures but has confirmed it met its target, supported by strong demand for its hybrid-electric vehicles. Therefore, the OEM was able to help fellow Japanese manufacturer Mazda, which only launched its first BEV, the MX-30, in 2020.

Similarly, Renault, Nissan and Mitsubishi pooled their emissions. The Renault Group itself benefitted from the Zoe BEV and its extended range of E-Tech hybrid and plug-in hybrid (PHEV) variants of models such as the Clio, Captur and Megane. Nissan’s fleet-average emissions were aided by the Leaf BEV and, combined, Renault-Nissan was only 2g/km short of its target in the first half of 2020.

In order to comply with European emissions targets going forward, Mitsubishi Motors will source models from Renault that meet regulatory requirements. ‘Starting 2023, Mitsubishi Motors will sell two “sister models” produced in Groupe Renault plants, which are based on the same platforms but with differentiations, reflecting the Mitsubishi brand’s DNA,’ Renault revealed.

Recall issues

As an example of the fine lines that manufacturers walk to meet their emissions targets, Ford was forced to consider pooling towards the end of 2020. The carmaker issued a recall of its Kuga plug-in hybrid (PHEV) in August of last year. As the carmaker did not have a battery-electric vehicle (BEV) in its fleet, it was heavily reliant on the PHEV to lower CO2 levels.

Ford had already faced a higher mountain to climb, with its 2017 emissions figures showing it needed to reduce CO2 output across its fleet by 26g/km (21%). The recall led the manufacturer to announce it was considering pooling, in order to meet its targets.

‘The current issues with the Kuga PHEV, resulting in a stop-ship and stop-sale have affected our plan to meet the EU’s 2020 emissions regulations for passenger vehicles on our own,’ Ford said to Autovista Group at the time. ‘Therefore, just as many other OEMs have done in Europe, we now intend to join an open pool with other OEMs for passenger vehicles.’

Ford entered into an agreement with Volvo in November. Although the US carmaker has not provided detailed figures, it did meet its 2020 target, likely thanks to this pool.

Sought after

Fiat Chrysler Automobiles (FCA) faced the biggest challenge to comply with European emissions targets. The US-Italian group needed to lower their emissions by 29g/km (24%) compared to 2017 levels. This largely explains why FCA pooled its emissions figures with US BEV manufacturer Tesla.

The move brought FCA’s average CO2 emissions down by offsetting the company’s petrol and diesel vehicles from Fiat, Jeep, Alfa Romeo and Maserati against the zero-emission outputs of Tesla’s BEVs. CEO Mike Manley already suggested in August 2019 that the Italian carmaker would be compliant because of the regulatory credit deal with Tesla. Honda was subsequently brought into this pool too.

Tesla is the largest BEV-only carmaker in Europe, having entered the market in 2008 with its limited production Roadster, before launching its first BEV sedan, the Model S, in 2012. The manufacturer built up a base of BEV models while other carmakers continued to promote ICE and was well-placed to capitalise when consumers started considering alternative options. Therefore, its CO2 credits would provide a good opportunity for carmakers to reduce their overall levels. While the US company sells fewer vehicles than bigger players in the automotive market, average emissions across its entire fleet will be no higher than zero.

The FCA annual report states that CO2 emissions data for last year is not yet available but: ‘the 2020 result is expected to move toward the 95g CO2/km EU average target due to the adoption of a multi-faceted approach which leveraged conventional technologies, high-voltage electrification, pooling arrangement contribution and compliance rules for 2020.’

‘The quantity of CO2 emissions in 2021 will be affected not only by market evolution (such as the expected reduction of diesel market share) but also by the commercialisation of low-emission and electrified vehicles. Finally, according to applicable EU regulations, current pooling arrangements for emissions compliance for passenger cars entered into by FCA are expected to apply in 2021,’ FCA added.

However, at the start of 2021, FCA merged with PSA Group to form Stellantis. CEO of the new manufacturing group, Carlos Tavares, has since been reported to have terminated the agreement with Tesla. As PSA Group met its emission targets in 2020, and as FCA’s figures will now merge with these, the company should be in a position to achieve its CO2 goals at the end of this year.

In the next instalments of this series, Neil King will explore those manufacturers who met their emissions targets on their own and carmakers who failed to reduce CO2 sufficiently, whether they pooled or not.

Used Car Market Update – April 2021

Used car market gathers pace

As expected, the UK used car auction market continued to gather pace following the easing of some restrictions in March. Sale volume and first-time conversion rate both continued the improvements seen for March, albeit not to the same degree, whilst the percentage achieved of the original cost new also increased month-on-month. In summary, the three key metrics all continued to move in the right direction, with more cars sold first-time and for more money.

Used Car Market Conversion Rate Graph April 2021

Used car market percentage original cost new graph April 2021

Demand continued to grow during the month, with premium SUVs and convertibles particularly sought after. Cars that required work were less desirable, so whilst there was a clear demand for vehicle stock, whether to fill up sites depleted during the lockdown or to prepare for increasing demand, it is clear that buyers were generally looking for cars ready for customer sale with the minimum delay or additional expenditure.

Used Car Retail Market

The metrics for the used car Retail market continue the positive theme from March. The number of observed sales increasing 13.6% – not as strong as the surge seen for March, but impressive nonetheless. The average sale price decreased a little. This is likely due to the increase in the sales of lower-priced cars. Buyers of these cars appeared to be less keen during the lockdown, which was reflected in the auction results, but the opening up of retail sites to more “normal” sales procedures saw a boom in demand at the auctions as retail demand increased.

Used car market retail observations graph April 2021

Used car market average retail sale price graph April 2021

Glass’s Live Retail prices measure the length of time a car spends on the forecourt, with a shorter duration generally pointing to a stronger retail market. The Average Days to Sell in April did improve compared with March, down from 48.7 days to 47.3 days, although the improvement may not be as great as some may have been expecting. However, with all of the recent restrictions, many cars may inevitably have been in stock for longer than would be desirable in a “normal” market.

The opening up of retail sites and the rise in demand is giving many retailers a confidence boost, so the practice of trading out overage stock added to the jump in retail sales will result in a bigger stock day improvement in May.

Used car market average days to sell graph April 2021

Outlook

Early indications for May are that the used car auction market is continuing to improve. Strong demand is continuing to drive values up, and whilst this is undoubtedly good news, dealers should be cautious. With many retailers topping up their sites to pre-lockdown stock levels whilst also keeping up with the increased demand, values may over recover. Supply into the auction market is also improving, so whilst May is shaping up to be a strong month for both auction and retail, the growth in auction values may slow towards the end of the month.

New Light Commercial Vehicle (LCV) Market Update – April 2021

A strong market for both new and used LCVs

An artificially inflated 798.8% increase in light commercial vehicle registrations in April 2021 were recorded, against a backdrop of twelve months ago when nearly all registrations stopped due to coronavirus lockdowns.

This growth was largely driven by demand in the 2.5-3.5-tonne sector, where 20,037 vans were registered. In the first four months of 2021, registrations in this sector have nearly doubled those in the same period in 2020 and reflect a market that saw its largest ever April total since records began. A year-to-date total of 127,796 registrations is a rise of 79.3% overall versus 2020 and reflects a market that is 23.2% up on the five-year average.

SMMT data revealed that the 30,440 April registration total is 27,053 units more than in April 2020, the first full lockdown month of the COVID-19 pandemic.

Breaking down the results highlighted huge increases for all sectors. Demand for vans under 2.0 tonnes rose by 884.6% whilst registrations in the between 2.0-2.5 tonne and 2.5-3.5 tonne sector improved by 1,042.7% and 674.2% respectively. The Pickup sector also recorded a 1,425.5% increase.

The Ford Transit Custom van combined with the Ford Tourneo Custom people carrier was crowned best-selling vehicle in the UK in April, outselling every other car and van on the market. The second best selling van was its big brother, the Ford Transit. The Mercedes-Benz Sprinter was third and the Volkswagen Transporter was fourth. PSA also returned a strong month, with five of their product ranges in the top ten places. Year-to-date Ford dominates, with four of its product ranges in the top ten. PSA also feature strongly, with the Vauxhall Vivaro, Vauxhall Combo, Peugeot Partner and Citroen Berlingo positioned in the top ten.

Top five LCV registrations

The effects of the pandemic continue to distress the automotive industry. Further lockdowns and COVID restrictions in many European countries, continue to affect many vehicle producing nations and the wider supply chain. Ongoing semi-conductor, steel, rubber and even wood shortages are now compounding the situation. With this fragile supply chain still at risk of disruption, there is still some way to go before the industry returns to normal. The last year has proved though that the commercial vehicle sector is nothing but resilient. Demand is strong, registrations are up and the outlook is much brighter.

April used Light Commercial Vehicle (LCV) overview

April has seen the used market in resilient form with prices remaining strong with high first-time conversion rates for anything that is retail ready.

The limited numbers of sub 2-year old stock sees buyers continuing to haggle over the best examples, with additional interest from franchised dealer groups ensuring prices have remained strong during April. Only 4% of all stock sold was in this age bracket during the month.

Twenty eight percent of stock sold in April was in the 2 to 4-year-old age bracket, whilst vehicles over six-years old contributed to 39% of all sales. Although medium-sized vans again proved the most popular during April with 38.9% of all sales, prices were down 0.94% on March. Small vans followed with 28.8%, up 13.2% on March and large vans were third with 23.4% up 2.4% on March.

With the SMMT reporting another strong new registration month in April, it is hopeful that vehicle de-fleets will start to find their way into the wholesale market soon. Although this will improve the supply of stock into the used market, there remains delays surrounding the supply of new vehicles to the UK. As a result, prices look set to remain high for the remainder of the year.

April in detail

Glass’s auction data shows the overall number of vehicle sales in April decreased by 6.85% versus March 2021, whilst first-time conversion rates remained steady at 86.9%.

Average sales prices paid in April decreased by 2.84% versus March, but remain 62.78% higher than the same point last year – the first full month of the pandemic. The average age of sold stock increased from 70.8 months in March to 72.2 months in April and was 10.8 months younger than the same point last year.

Average mileages remained static during April, moving from 86,603 miles in March to 86,442 in April (-0.19%). This mileage was 14,823 miles higher than in April 2020.

Glass’s continues to monitor the LCV market closely and has an open dialogue with auction houses, 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.

Originally written for Commercial Fleet.

Glass’s One Minute Market Update – April 2021

New car registrations in April were unsurprisingly up on last year with just over 141,500 cars registered, according to data published by the Society of Motor Manufacturers and Traders (SMMT). This was an increase of over 3,000% on April 2020s full Lockdown tally of just 4,321.

Despite a return to sensible numbers, excluding last year’s total, April 2021 produced the lowest number of April registrations since 2011, but coming off the back of over three months of lockdown, with no opportunity for consumers to access physical showrooms, it was not a bad result. It underlines the reliance that the UK buying public has on a physical sales process, with the old adage of ‘bums on seats sells’, which refers to the need for test drives, still proving relevant in today’s market.

The wholesale used car market spluttered back into life in April, although the beginning of the month was quieter than expected. Instead of rushing out in preparation for showrooms to begin opening on 12 April, it took until the latter part of the month for customer activity to ramp up. That said, ever since, it has not stopped and continues to strengthen. The percentage of cars selling on the first time of asking increased in April by 1.7 percentage points to 84.4% compared to March. Pretty much all segments have enjoyed a significant uplift in hammer prices in the first two weeks of May, with convertible models the stand out performer, despite already seeing values increase over the past couple of months.

The outlook for the wholesale market is very good, with demand expected to remain at current levels well into June. What is a little more difficult to predict is what the level of supply will be. More part-exchanges should begin flowing through to auction channels now that the new car market is producing reasonable numbers, and fleet registrations indicate that lease vehicles are being changed, which will lead to more de-fleets, so it will be interesting to see how the supply and demand dynamic develops over the next couple of months.

New Car Market Update April 2021

April’s new car market showed some recovery as the government eased lockdown rules to allow showrooms to reopen their doors during the month.

Drawing comparisons to last year’s figures is problematic as the country was in full lockdown and registrations were almost non-existent. Therefore a 3000% increase to 141,583 from 4,321 registrations needs to be put into context. When April 2021 is compared to pre-pandemic April 2019, total registrations were lower by 12.1%, with drops across all sectors as shown in the table below.

Total registrations recorded in April table

Data courtesy of SMMT

Year-to-date registrations for 2021 now stand at 567,108 units, which represents a reduction of nearly a third of the average recorded over the past decade. However, the full impact of showrooms reopening has yet to be realized given the time lag from visiting a showroom to taking delivery.

The major growth area continued to be the alternative fuel sector, with plug-ins accounting for 13.3% of the April market. Indeed, when compared to April 2019 the growth has been almost exponential as supply and choice improves.

Plug-in new car registrations April 2021 graph

Data courtesy of SMMT

A full recovery is some way off, especially as many manufacturers struggle to get back to full capacity around the world due to high COVID-19 infection rates. Also, the supply of semiconductors is still problematic and creating long lead times for build and delivery.

The outlook for the next couple of months is positive, as the Government continues to roll back lockdown rules coupled with the successful vaccination rollout and a low infection rate. Consumer and business confidence will keep improving and the new car market should return to a degree of normality with consumers having full access to dealer showrooms.

BEV vs ICE: a race to price parity

Battery-electric vehicles (BEVs) will achieve price parity with their fossil-fuel counterparts across Europe from 2027 at the latest. This is according to the results of a new BloombergNEF study commissioned by the clean-transport campaign group Transport and Environment (T&E).

Electrically-chargeable vehicle (EV) adoption is increasing with help from incentive programmes and expanding model offerings. In the first quarter of this year, BEVs accounted for 5.7% of EU new-car registrations, an increase of 59.1% compared to the first three months of 2020. Plug-in hybrids (PHEVs) took 8.2% of the market, equating to an increase of 175%. Meanwhile, diesel and petrol-powered cars continued to see falling volumes.

However, the automotive industry is still in the early stages of electrification. Presently, those investing in EVs have both the confidence and capital to invest in electric drivetrains. As components, particularly batteries, become cheaper and more technologically advanced, EV price tags should shrink.

Price parity

The segment will dictate a BEV’s point of price parity with petrol in the coming years, with larger vehicles becoming more affordable more quickly. According to the BloombergNEF study, light vans will lead the charge, becoming cheaper than their ICE counterparts in 2025. BEVs in the C and D segments will follow in 2026, while small cars (B segment) bring up the rear in 2027.

Source: T&E

‘EVs will be a reality for all new buyers within six years,’ said Julia Poliscanova, senior director for vehicles and e-mobility at T&E. ‘They will be cheaper than combustion engines for everyone, from the man with a van in Berlin to the family living in the Romanian countryside. Electric vehicles are not only better for the climate and Europe’s industrial leadership, but for the economy too.’

Building better batteries

So, what will be the driving force behind shrinking costs? The BloombergNEF study points to falling battery costs, new vehicle architectures and dedicated production lines as leading factors in reducing price, even before subsidies come into the equation. ‘An optimal vehicle design, produced in high volumes, can be more than a third cheaper by 2025 compared to now,’ the study states.

Source: T&E

Batteries in particular have had an important role to play as they have consistently been the most expensive EV component over the past decade. In the US, they currently account for roughly 30% of an EV’s cost. In Europe, prices are more widely spread, raising the continent’s average battery price above the global average – resulting partly from some lower-volume orders. But as battery prices fall and more optimised platforms are developed, EV prices should follow.

‘New chemistries, better manufacturing methods, innovative cell and pack-design concepts and other factors contribute to average prices per kilowatt-hour declining by 58% from 2020 to 2030,’ BloombergNEF points out. Past this point, new technologies like the solid-state battery will continue to drive down price. These smaller, more powerful units are seeing an uptick in interest from OEMs. Most recently, BMW and Ford led an investment round in Solid Power, a producer of solid-state batteries.

Plugged-in projections

Europe could see 4.3 million plug-in vehicles sold in 2025, representing roughly 28% of the market. BEVs would capture over half of those sales, with the rest made up by PHEVs as carmakers use them to meet emissions targets. In an economics-driven scenario, BloombergNEF believes BEVs could claim up to half of Europe’s market share of sales by 2030 and 85% by 2035.

T&E points out that battery-electric cars and e-vans could reach 100% of new sales by 2035 – including southern and eastern Europe, where initial take-up rates have been comparatively slow. However, this would be dependent upon lawmakers ramping up CO2 targets and producing policies to stimulate market developments including the introduction of more infrastructure. The environmental group states that without these additional policies, battery-electric cars will claim 85% of the EU market and e-vans 83%. This would mean missing Europe’s goal to decarbonise by 2050.

‘With the right policies, battery-electric cars and vans can reach 100% of sales by 2035 in western, southern and even eastern Europe,’ said Poliscanova. ‘The EU can set an end date in 2035 in the certainty that the market is ready. New polluting vehicles should not be sold for any longer than necessary.’

In April, T&E published the results of a poll of 15 European cities showing that nearly two thirds of urban residents support a ban on the sale of new petrol and diesel cars by 2030. Additionally, Volvo Cars, Uber and LeasePlan were recently among a group of companies calling for an end date to new ICE car purchases in Europe no later than 2035. While requests for electrification mount alongside evidence of EV credentials, shrinking price tags will undoubtedly increase adoption rates.

The Van’s Headlights: The Future of the Pick-up Sector

Will the reduced number of manufacturers have a long term impact on this sector?

The pick-up

Created 100 years ago as a purely utilitarian vehicle, the pick-up has transformed into a multi-purpose vehicle often more comfortable on-road than off. With the internal combustion engine ban coming into effect in just eight and half years, what does the future hold for this sector? The pick-up of the future is very much on the horizon and enthusiasts should have much to look forward to, albeit with some uncertainty. Glass’s Chief Commercial Vehicle Editor, Andy Picton, takes a closer look at the current situation and what could be coming our way.

The demise of the pick-up

Mercedes-Benz and Fiat have already ceased sales of the X-Class and Fullback pick-ups. Volkswagen Group ceased production last year of Amarok with a replacement not due until 2022. More recently, Mitsubishi announced that it would cease new sales in the UK during 2021, with the last new L200 likely to be registered during quarter three this year. Equally disappointing is that Nissan has revealed that production of the Navara will stop by the end of this year, with sales ending early in 2022.

On the face of it, a worrying time ahead for the sector. Only the Ford Ranger, Toyota Hilux and Isuzu D-Max remain as major volume sellers, especially with SsangYong in receivership whilst its owner Mahindra and Mahindra looks for a new owner. Over the last decade, the sector enjoyed huge growth, but pick-up sales were down nearly 33% in 2020, with just 35,691 registrations compared to 53,055 in 2019. The Ford Ranger continues to be the best selling pick-up in the UK, registering over 13,000 units or nearly 25% of the overall sector total.

Future pick-ups

On the horizon, there are chinks of light creating hope for the sector, with new product launches from established players on the way. Below the article outlines new launches and, what is in the pipeline together with a look at new ‘disruptors’ preparing to enter the market. There is a chance that some of the disruptors will enter the UK and European markets giving the established brands an overdue shake-up.

Isuzu

Delayed due to the pandemic, Isuzu entered 2021 with the new D-Max pick-up. The vehicle is powered by the same 1.9TD engine but with a new assertive look. The new D-Max is packed with safety features, has a lighter and stiffened chassis and a premium interior.

Toyota

The Hilux facelift is packed with a more powerful 2.8-litre engine under the bonnet. This bucks the engine downsizing trend followed by other manufacturers and is proving popular with customers. The new 201bhp is only available on Invincible and Invincible X trim levels and compliments the existing 2.4D-4D 150bhp model range.

Maxus

SAIC (Shanghai Automotive Industry Corporation) have plans to launch a pick-up in the UK during 2021 or early 2022. Likely to be called the T90, with power from either a 2.0-litre turbo 163bhp, 375Nm or a 215bhp 480Nm twin-turbo diesel engine. Available with manual and automatic transmissions, two or four-wheel drive and with a 5-year, 125,000-mile warranty. Hybrid and full battery-electric versions are expected.

Great Wall

Although not currently operating in the UK, Great Wall has previously sold the Steed double cab pick-up here. Three new pick-ups were launched in China in 2020 as part of their P-Series range, consisting of passenger, off-road and electric commercial pick-up, with over 100 different configurations available. The electric pick-up has a range of up to 500km (310 miles) and a stated charging time of two hours. The P-Series will be Great Wall Motors first global product and although no timeframe is yet available for a possible UK launch, Isuzu who remain the appointed distributor for Great Wall are closely following developments.

INEOS

This British firm is developing a no-nonsense 4×4 to plug the gap left by the old Land Rover Defender. Built from the ground up on an all-new platform, the Grenadier will feature a ladder frame and differential locks. The Grenadier is being engineered in Germany and built in France. Production starts later this year, with customer deliveries starting early in 2022. The Grenadier will be powered by torquey 3.0-litre BMW petrol and diesel engines with automatic transmission and be available as a station wagon and a double cab pick-up from launch. Expectations are for a hybrid and an electric version at a later date. Prices to be confirmed.

Ford and Volkswagen

The next-generation Ranger and Amarok models will be built by Ford under a new alliance with Volkswagen. Using a new shared platform the new pick-ups are due for launch during the second half of 2022. Interestingly, Volkswagen state that there are no plans at this stage to launch a full battery-electric version of the Amarok which may limit the vehicle lifecycle in Europe. Ford may look to use technology implemented in the new F150 EV pick-up in the US for the new Ranger.

Nikola

The Badger is a hydrogen fuel cell/battery electric double cab pick-up that is stated to have an overall 600-mile range, with a 300-mile range on battery alone. This 906 horsepower, 980Nm machine can tow up to 3.6 tonnes and features a separate 15-kilowatt power outlet for tools, lights and compressors, enough to assist a construction site for 10-12 hours without a generator. Expected to go sale during 2021 in the US, European launches are as yet unconfirmed.

Rivian

Founded in 2009 and part-funded by Amazon and Ford Motor Company, the battery-electric R1T double cab pick-up will be on sale in the US later this year. The R1T has a range of up to 400 miles on a single charge and will be available with three different battery sizes. The ability to fast-charge at 160kW will potentially add 200 miles to the range in just 30 minutes. On the downside, its payload is currently only 800kg, which means they have some work to do if they are to qualify for commercial vehicle taxation rules in the UK. Prices in the US start at just below £44,000 for the entry model, rising to nearly £73,000 for the longe range version. European sales start in 2022. Rivian also plans to build 100,000 battery-electric vans for use by Amazon in North America with deliveries starting in 2022.

Bollinger

Looking like a stretched Land Rover Series 1, the B2 battery-electric double cab pick-up features front and rear motors helping to generate 614hp and 668Nm of torque. Unique full-length load capabilities along with a retro-style cabin layout guarantee a standout vehicle, as will its starting price of over £100,000. Orders are being taken for US sales, but at 17.3” long and 7.41” wide, it icle along with a retro ‘old skuiis unlikely that this beast will reach UK shores.

Tesla

Standing at an enormous 19.4” long, 6.3” high and 6.8” wide, the Cybertruck is unlikely to see the light of day in the UK either, because of its size and is unlikely to meet stringent European safety and type-approval legislation. Tesla has hinted that a smaller 300-mile range version for the European market would be considered for a later date.

Sector future

With the reduction in current competitors, Ford, Toyota and Isuzu will benefit in the short term. The demise of Mitsubishi and Nissan has meant there is a general shortage of available pick-up stock. With 10 month lead times, deliveries dates are already stretching into 2022. Extended lead times look likely to remain for some time as production struggles to get back to full capacity, leading to rental companies and fleets placing orders now to guarantee deliveries.

The longer-term future of the pick-up sector looks uncertain. There is still no conventional electric pick-up truck on general sale in the UK, although the whole life cost benefits make ownership an attractive proposition. Environmental benefits and the improved performance of electric propulsion offroad should also make the choice compelling.

The market in Europe and the UK is much smaller overall than in the US, where over three million pick-ups were sold in America in 2019. Unsurprisingly, most of the disruptors are American as the demand there is much greater.

There are currently no electric pick-ups due for launch from the mainstream manufacturers who appear to be prioritising the development of new car platforms to help them deliver their corporate CO2 targets.

With so much potential in the pick-up and LCV sectors for battery-electric power, there is hope that this technology can cascade to electric pick-ups soon, otherwise, this sector is in real danger of disappearing altogether.

Are EVs as green as they seem?

The last year has been dominated by a single health emergency that brought the world to its knees. But for decades, scientists and campaigners have been warning of another impending crisis. As governments put environmental regulations in place, carmakers are transitioning into clean mobility companies. Spearheading this change, electrically-chargeable vehicles (EVs) appear poised to take the helm from internal combustion engines (ICEs). But for this handover to work, these electric models must prove to be environmentally advantageous. Autovista Group Daily Brief Journalist Tom Geggus asks, are EVs as green as they seem?

According to the European Commission, passenger cars are responsible for around 12% of total EU CO2 emissions, putting the automotive industry in the green spotlight. A poll of 15 European cities recently revealed nearly two-thirds of urban residents back a ban on the sale of new petrol and diesel cars by 2030. OEMs and mobility providers are also supporting a faster transition to zero-emission transport. Volvo Cars, Uber and LeasePlan are among a group of companies calling for an end date to new combustion car purchases in Europe no later than 2035. This would leave a large ICE-sized hole for EVs to plug. But considering its entire lifetime, is an electrified vehicle that much cleaner than a petrol or diesel-powered one?

Significantly smaller footprint

Published in March last year, research from the universities of Cambridge, Exeter and Nijmegen showed that in 95% of the world, an electric car has a significantly smaller carbon footprint than one powered by fossil fuels. Dr Florian Knobloch, University of Cambridge fellow, German Federal Ministry policy advisor, and the paper’s lead author, spoke with Autovista Group’s Daily Brief about the findings.

The academic team carried out extensive life-cycle assessments of emissions produced through vehicle use, as well as production and waste processing. ‘When you look at the production stage, it takes significantly more energy and material input due to the battery,’ Dr Knobloch said. But the EV then makes up for this larger burden across its entire lifetime thanks to far lower running emissions.

‘It is a myth that electric cars do increase emissions, even on a lifetime basis,’ he said. ‘In most parts of the world already, today EVs will decrease emissions, even if you factor in everything from production to recycling.’

‘A snowball effect’

When dividing the world into 59 regions, the research revealed that in 53, electric cars are already less emissions-intensive than one powered by petrol or diesel. These regions include Europe, the US and China. In fact, lifetime emissions from EVs were found to be 70% lower than petrol cars in countries like France and Sweden, where large amounts of electricity are generated through renewable and nuclear sources. However, the same cannot be said for counties like Poland, where dependence on coal-fuelled power stations lingers.

But as grids worldwide are rewired with decarbonisation in mind, even these regions will see more reason to go electric. So, as EVs become increasingly efficient, they will outstrip ICEs which have already reached near-peak efficiency. Dr Knobloch points out that even with the inclusion of greener technology like biofuels, there is little chance for the carbon footprint of ICE vehilces to greatly improve.

This transition to electromobility does take time. Confidence in EVs still needs to build up: from the early adopters to the mainstream. ‘Every EV you buy now increases the chance of more EVs being bought in the future,’ Dr Knobloch explained. As consumers are exposed to an increasing number of EVs, a snowball effect will take place with confidence growing alongside adoption, encouraging more people to take the electric leap. The study projects that globally, half of cars on average could be electric by 2050. This would lower global CO2 emissions by up to 1.5 gigatons annually.

A comparative tool

In Europe, clean-transport campaign group Transport and Environment (T&E), found that electric cars emit on average almost three times less CO2 than their ICE equivalent. Again, this figure considers wider impact, including the sourcing of battery materials, electricity production, and even power-plant construction. To illustrate the difference between the lifetime emissions of EVs and ICEs, T&E created a tool to compare drive types, considering the year of purchase, vehicle type and location, as well as electricity used for battery production.

Lucien Mathieu, manager overseeing road vehicles and e-mobility analysis at T&E, spoke with Autovista Group’s Daily Brief. As the tool’s creator, he explained it aims to combat other bias analysis of electric-car emissions, that might rely on outdated data, particularly given the rapid advance of EV technology. Using the most up-to-date information, T&E’s tool reveals CO2 emissions per kilometre, as well as in tonnes over lifetime.

For example, comparing two medium-sized cars bought in 2020, T&E’s tool reveals the electric car, on average, is responsible for 90 grammes of CO2 per kilometre versus petrol with 253 grammes. Considering tonnes of CO2 over distance driven, the EV’s ‘carbon debt’ from production is paid off quite quickly thanks to its low-usage emissions. This compares starkly to an ICE car, which is far less efficient when converting its fuel into movement.

This canyon between EV and ICE only looks set to grow as battery technology continues to advance, while fossil-fuel cars have already achieved close to their peak efficiency. A T&E study recently calculated that an EV battery uses 30 kilograms of raw materials with recycling, compared to the 17,000 litres of petrol burned by the average car.

‘The valuable minerals mined to make electric-car batteries will be used and reused unlike those of oil,’ said Greg Archer, UK director of T&E. ‘Over its lifetime, an average-engined car would burn through a stack of oil barrels, 25 storeys high, creating about 40 tonnes of CO2 and worsening global warming. In comparison, only 30 kilograms of metals would be lost each time an electric-car battery is recycled – roughly the size of a football.’

This gap will increase as advancements drive down how much lithium is needed to make a battery by half over the next decade. Cobalt will drop by over three-quarters and nickel by around a fifth. So, as EVs develop, T&E plans to keep their tool updated with the latest available evidence, as well as expanding its scope to include plug-in hybrids (PHEVs). But of course, EVs also benefit from technologies developing outside of their own powertrains.

Powering vehicles

At the end of last year, more than 3,500 European power companies, represented through the federation for the European electricity industry, Eurelectric, came out in support of a minimum 55% reduction in greenhouse gas emissions by 2030. As more electricity generators and distributors throw their weight behind cleaner-energy solutions, including the use of more renewables, EVs can be expected to become greener.

Speaking with Autovista Group’s Daily Brief, Petar Georgiev, climate and E-mobility lead at Eurelectric, pointed to a larger picture when considering the energy behind EVs. ‘You do have to keep in mind what the actual carbon footprint is in different countries, at different times, and also how it is changing, because for us in the power sector, we clearly see that the grid is becoming cleaner and cleaner,’ he said. ‘But if we have to wait to have a fully renewable grid, and then only start to integrate renewables, that would probably be a very big mistake.’

Because an EV’s CO2 levels can be lowered long before its first charge, it makes sense to take a holistic approach to EV emissions and electricity usage. For example, manufacturers can opt for more efficient production methods, even incorporating renewables into the process. Furthermore, which cars plug into electromobility will be hugely important.

Eurelectric recently identified the electrification of Europe’s vehicle fleets as a ‘catalyst for clean mobility throughout the 2020s.’ The continent’s fleet is made up of 63 million cars, vans, buses, and trucks, operated by private companies or public authorities. The federation explained, however, that despite only making up 20% of the parc, these vehicles account for 40% of all kilometres travelled. They also account for 50% of CO2 emissions from transport. ‘Electrification of car fleets can be a real game-changer,’ Kristian Ruby, secretary-general of Eurelectric said. ‘It comes with tangible reductions of total costs of ownership and CO2 emissions. So, it is a good deal both for fleet owners and society at large.’

While the electrification of vehicles contains the potential to reduce CO2 emissions dramatically, it is enormously dependent upon usage. So, when asked, ‘are EVs as green as they seem?’ the answer is yes, but adoption rates will determine their success.

Used Car Market Update- March 2021

Positive outlook as lockdown eases

The big news for the UK was the relaxation of some lockdown rules, which began for dealers in early April. Crucially for the car retail industry, this meant that they could once again open their sites to the general public. As expected, this triggered a rise in auction activity as dealers looked to top-up their stock and prepare for the anticipated rise in demand.

We also saw the introduction of the March registration plate (21 plate), which is an event that typically brings a boost to the used car market with an influx of part-exchanges in the latter part of the month. Auction sale volume saw a marked increase compared with February and an even bigger hike compared to March 2020. The first-time conversion rate also rose in March, up 8.1% from February to 82.7%. This was 6.3% lower than March 2020, but still pretty good considering we were emerging from lockdown.

General bidding activity appeared to improve through the month, although cars requiring work or lacking specification still struggled. Convertible values noticeably improved, buoyed by the approach of Spring and, quite possibly, a more positive outlook as more restrictions are expected to be relaxed over the coming weeks and months.

Used Car Retail Market

Looking at the used car retail market for March, it is clear why the auction market saw such a rise in activity. The number of observed sales rose by 24.2% from February to March, and were a very impressive 39% higher than for March 2020 – the difference between transitioning out of lockdown rather than heading towards one.

Used car market observations graph March 2021

Unsurprisingly, this ramping up of demand led to a reduction in the length of time cars were spending on the forecourt. GlassNet Radar reported that the average for March was 48.7 days, which was an improvement of just over 9 days from the previous month. It is 9.7 days longer than for March 2020 however, but considering the circumstances it is an encouraging improvement.

Used car market average days to sell graph March 2021

Outlook

With April having less pandemic-related restrictions than we have seen for some time, we can expect to see another busy month for both wholesale and retail used car sales. Of course, there may be a degree of pent-up demand that has been released, but with more regions of the UK returning to (relative) normality it is fair to expect that the used car industry will follow suit.

New car registrations will still be down for this year – higher than for 2020 but much lower than we were seeing pre-COVID – which means there will be a shortage of nearly-new stock for some time yet, and this will filter down through the age bands over the next couple of years which should help to ensure values of used cars remain relatively healthy.

Launch Report: BMW iX3 – conventional and balanced electrification

The iX3 is BMW’s first pure-electric X model and is the most conventional, being effectively a battery-electric vehicle (BEV) version of the best-selling X3.

The iX3 offers good performance, with strong linear acceleration – as usual for a battery-electric vehicle (BEV). The model also strikes a good balance between power and battery capacity, with competitive electricity consumption. In terms of agility and dynamics, the iX3 is slightly better than its direct rivals overall. As the battery is located under the car, this also explains the good roadholding.

Standard equipment is comprehensive, including three-zone climate control, heated and powered front seats (with memory function on the driver’s side), BMW Teleservices and wireless phone charging. Safety features include emergency-assist and rear cross-traffic alert. The 458km range of the iX3 is second only to the Jaguar I-Pace’s 470km range, and it has the fastest charging time when connected to an 11kw AC wallbox, of 7.5 hours.

In addition to BMW’s strong brand image, the iX3 is supported by the company’s longer expertise in electrification. This started with the i3, which has been on the market since 2013, and was followed by plug-in hybrid (PHEV) engines offered on different models in the range, including one for the brand’s X family.

As the first conventional BEV from BMW, the iX3 compares well against key competitors. It is offered at an attractive entry price point and the popularity of both the brand and the X3 range should ensure plenty of demand. Given that the iX3 is very close to the X3, BMW’s D-SUV range is now available in diesel, petrol, PHEV and BEV versions.

Click here or on the image below to read Autovista Group’s benchmarking of the BMW iX3 in France, Spain and the UK. The interactive launch report presents new prices, forecast RVs and SWOT (strengths, weaknesses, opportunities and threats) analysis.

New Car Market Update March 2021

New car registrations in March showed the first green shoots of growth since August 2020, with 29,280 more units registered compared to the same month last year. This represents an increase of 11.5% according to figures published by the Society of Motor Manufacturers and Traders (SMMT).

However, March is also the anniversary of the first full lockdown caused by the COVID-19 pandemic, so comparisons with 2020 figures will fluctuate wildly throughout the year. If compared to March 2019’s pre-pandemic normal market, March 2021 registrations fell 38%.

March 2021 UK new car registrations graph

Data courtesy of SMMT

The March on March growth figure was not uniform across all sectors. While Fleet volume grew 28.7% or 33,784 units and Business was up 18.6% or 902 units, sales to private consumers fell 4.1% or 5,406. In March 2020, the Fleet and Business sectors suffered larger falls in registrations than retail, so had a lower base point to grow from. Besides, many lease contract extensions have expired, hence an uptick in March registration activity, as company cars are often ordered without any physical viewing. Private consumers are more likely to purchase a vehicle after visiting dealerships first, which is why the April 12 reopening of non-essential retail is so important for the new and used car markets.

Despite March’s rise in registrations, the new car market dropped by 58,032 cars or 12% in quarter one, with sales to private consumers affected most as shown in the chart below.

Data courtesy of SMMT

The shift to alternative fuelled cars is continuing at pace, with plug-ins making record volume. Battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) took a combined market share of 13.9%, up from 7.3% last year, as the choice available to customers continues to grow. Registrations of BEVs increased by 88.2% to 22,003 units, while PHEVs rose by 152.2% to 17,330. Hybrid electric vehicles (HEVs) also rose 42.0% to reach 21,599 registrations.

For this positive trend to continue, the government needs to maintain customer incentives for new cleaner technologies, whilst planning and implementing improved infrastructure to cope with the increasing registrations.

As we look ahead to the second quarter, it is logical that the new car market will catch back some of the ground lost in Q1, as the market was effectively closed in April and May last year due to Lockdown-1, with only just over 24,400 cars registered in the two months combined.

Glass’s One Minute Market Update

New car registrations increased by 11.5% in March according to figures released by the Society of Motor Manufacturers and Traders (SMMT). Sales to private individuals fell 4.1% with ‘click and collect’ hampering sales rate. Fleet and business registrations more than made up for that shortfall, increasing 28.7% and 16.6% respectively, with physical transactions less common in these sales channels, so the lockdown restrictions had less impact.

Although an 11.5% increase to 283,964 registrations is a positive result in the current climate, it is significantly below 2019’s registration tally of 458,054, and for context, 2019’s total was the lowest for five years.

There was a marked improvement in wholesale trading conditions in the latter half of March, as dealers began filling gaps on forecourts in preparation for the reopening of sites to physical customers on 12 April. Overall conversion rates returned towards seasonal norms and hammer prices began rising. The percentage of cars selling on the first time of asking was 82.7% which is up 6.2 percentage points from February but still over 6 points behind March last year.

Glass’s expects a very buoyant period of retail activity from 12 April, with wholesale trading following a similar pattern as dealers replenish stock more regularly. Somewhat unexpectedly, one of the national auction groups has announced the return of some physical auctions from 12 April, with buyers welcomed back into auction halls, but adhering to social distancing measures. It will be interesting to see how the other national auction companies respond or whether they will remain on their current course of online-only sales programs.

New Light Commercial Vehicle (LCV) Market Update – March 2021

On the face of it, an impressive 85.5% increase in light commercial vehicle registrations in March 2021 reflects a market that saw its largest ever rise since the introduction of the two plate system in 1999. This figure masks a market that is 10.9% down on the 2015-2019 average and reflects the struggles this industry has had during the pandemic. Delayed pipeline orders and cash-rich businesses replacing vehicles at the end of the tax year boosted registrations in March, with all sectors enjoying large increases. A year-to-date total of 97,356 registrations is a rise of 43.4% overall versus 2020.

SMMT data indicates that the 56,122 March registration total is 25,875 units more than in March 2020, the first month of the COVID-19 pandemic.

Breaking down the results reveals that there were increases for all sectors. Demand for vans under 2.0 tonnes rose by 96.1% whilst registrations in the between 2.0-2.5 tonne and 2.5-3.5 tonne sector improved by 31.5% and 101.0% respectively. The Pickup sector also recorded an 85.7% increase.

The Ford Transit Custom resumed its number one position, outselling its big brother, the Ford Transit in second spot by more than two-to-one. Ford managed to place four of its product ranges in the top ten for the second month running. In addition to the Ford Transit Custom and the Ford Transit, the Ford Ranger was fourth and the Ford Transit Connect was eighth. The registration top ten also saw Toyota’s Hilux pick-up feature in ninth position.

Top five LCV registrations

The effect the pandemic has had on the automotive industry over the last twelve months cannot be underestimated. Further lockdowns in many European countries continue to stymie vehicle production and the wider supply chain and does little to encourage business confidence.

In the UK, those who rely on incentives as essential to making battery electric vehicles affordable have derided the decision to reduce the Plug-in Van and Truck Grant. By the end of 2022, most van manufacturers will be able to offer a battery-electric vehicle (BEV). Instead of making BEVs an attractive and affordable proposition to UK businesses, the latest grant reductions place the country even further behind other markets who are at this time, increasing their subsidies. The eligibility change has already wiped out all-bar-one PHEV from the approved list, whilst the grant reduction is likely to affect the supply of BEVs to the UK. This at a time when commercial vehicle operators were beginning to show confidence and a desire to buy electric vehicles.

March used Light Commercial Vehicle (LCV) overview

LCV used market resilient in March
Minibus values strengthen as children return to school
Slowly increasing stock availability
Versatile medium-sized panel vans

March has seen the used market in resilient form overall, driven mainly by the expanding home shopping market and the construction industry. Prices have remained strong and first-time conversion rates high for anything that is retail ready.

The minibus sector has struggled badly during the pandemic due to COVID restrictions, but as children return to schools around the country, there has unsurprisingly been an increase in demand. This demand has predominantly come from private sector operators fulfilling education authority contracts, rather than the schools themselves.

Buyers are actively avoiding damaged stock on the open market, whilst prices have continued to hold strong over the month. A steady trickle of new stock into the used market has seen buyers continue to haggle over the best examples, with sub-two-year-old stock attracting additional interest from franchised dealer groups running low on new stock. With less availability in this age bracket in March, prices increased across all sectors. There is more duplication available at auction currently as some utility companies start to de-fleet older stock.

In March less than 50% of all sales were in the zero to 4-year-old age bracket, whilst more vehicles in the over six-year-old age bracket were sold than in February and at higher prices. Medium-sized vans again proved the most versatile and popular overall during March with 37.7% of all sales. Small vans followed with 26.7% and large vans were third (26.0%).

With the SMMT reporting a strong March new plate registration month, there will be vehicle de-fleets that find their way into the wholesale market over the next weeks and months. This should slowly start to ease supply and demand issues, although prices look set to remain high for the best stock well into the second half of 2021.

With global vaccinations on the increase, the easing of lockdown measures has seen some of the smaller auctions return to physical sales. Others who have benefitted from operating solely as an online business during the pandemic have decided to continue this way, with a view to reassessing the situation later in the year.

March in detail

Glass’s auction data shows the overall number of vehicle sales in March increased by 12.8% versus February 2021, whilst first-time conversion rates increased by 3.0% to 87.2%.

Average sales prices paid in March increased slightly by 0.86% versus February and are now a third higher than the same point last year. The average age of sold stock increased from 69.0 months in February to 70.8 months in March and was 3.8 months younger than the same point last year.

Average mileages exceeded 80,000 miles for the first time in twelve months, increasing from 79,936 miles in February to 86,603 miles in March. This mileage was 6,073 miles higher than in March 2020.

Originally written for Commercial Fleet

German registrations start slow recovery in March

New-car registrations in Germany increased 35.9% in March, according to the latest figures from the Kraftfahrt-Bundesamt (KBA).

The figure was inflated due to the country’s first COVID-19 lockdown closing dealerships from mid-March in the previous year. However, at that time, registrations performed well compared to other countries. While Spain, France and Italy posted losses of 69.3%, 72.2% and 85.4%, respectively, Germany only saw a decline of 37.7%.

At the end of the first quarter, new registrations totalled 656,452 units, down 6.4% compared to the first three months of last year. This is despite dealerships being closed. The country’s market also suffered due to a VAT increase, with taxes rising from 16% to 19% at the beginning of the year. Autovista Group estimates that around 40,000 registrations were pulled forward into December last year as a result.

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Brand increases

All domestic brands showed positive growth in March 2021, the strongest being Smart with a 304.4% increase. Double-digit increases were recorded by Opel (75.1%), Mini (58%), Porsche (55%), Volkswagen Passenger Cars (VW) (39.1%), Mercedes (36.7%), Audi (17.6%) and BMW (17%). VW claimed the largest share of new registrations, taking 19.3% of the market.

Alfa Romeo showed the most significant increase among the imported brands, up by 114.6%. Fellow Stellantis stablemate Peugeot saw sales grow 78.4% while Tesla enjoyed a 63.6% boost. However, Honda (-33.3%), Mitsubishi (-30%) and Jaguar (-10%) were among those to see sales decline in the month.

Electric closes the gap

In terms of fuel type, the market for battery-electric vehicles (BEVs) achieved a significant increase of 191.4%, with a market share of 10.3%. With German car brands such as VW and BMW increasing their focus on electrification, there now seems to be an appetite for the technology amongst buyers. Plug-in hybrid (PHEV) models achieved a 12.2% market share, with sales increasing 277.5% in the month.

The swing to electric drives is more evident when internal combustion engines (ICE) sales are considered. New registrations of passenger cars with petrol engines increased by 7.1%. However, the market share was just 39.4%. The sale of diesel models continued to decline, with 5% fewer in March 2021 for a 22.1% market share. For the second s u ccessive month, diesel sales were outpaced by those of hybrids. When including standard and PHEV models, this powertrain type took 27.8% of the market.

The figures, therefore, show that 38.1% of registrations in Germany during the last month were non-ICE models. This is just 1.3% below the market share of petrol in March. It may not be long until sales of these vehicles outpace those of more traditional powertrains.

Germany extended its lockdown period to 18 April following a spike in infection cases. However, the Federation of Motor Trades and Repairs (ZDK) argued that vehicle dealers should be allowed to reopen fully. The group’s main argument is that while a hairdresser, with a floor space of 10m2, is allowed to have one customer, car showrooms with a floor space of 500m2 cannot open.

Changing Convertible Trends

As the days get longer and warmer and the garden furniture is dusted down, many people are drawn to the idea of owning a convertible to achieve that wind in the hair driving experience. However, Is the draw as strong as ever for these cars that are often impractical, expensive but rare and stylish?

During the 1990s, manufacturers realised the potential in this profitable segment after the success of the Mazda MX-5. They set about designing new models to increase their ranges, expanding not just to the traditional two-seater roadster but also to four-seat coupe versions of their popular saloon and hatchback models. Then came the advent of the folding “tin-top” roof to make the Convertible an all-year-round proposition.

However, did the extensive choice of Convertibles grow so large that the exclusivity factor diminished, and have consumers turned to other segments that have become more fashionable?

Up until the year 2000, the number of Convertibles registered new each year was around 2% of the whole market, according to data from the Society of Motor Manufacturers and Traders (SMMT). The peak year was 2004 where Cabriolet and Convertible registrations reached 116,500, equating to 4.6% of the new car market. The numbers have dropped to less than 2% for the last 5 years running and were only 1.2% in Coronavirus hit 2020.

What about the choice during the last twenty years? The chart below shows the number of ranges available by year.

Convertible ranges registered graph 1998-2020

The peak in the number of different ranges was in 2007. This has dwindled in recent years as models such as the Mercedes SLK/SLC, Volkswagen Golf and Beetle and Fiat’s 124 disappear. Many manufacturers no longer offer a convertible in their range.

Manufacturers are reacting to the fall in consumer demand for convertible versions of two-seater sports and small cars, as demand switches to other more popular body styles. There is no need to look beyond the SUV/Crossover segment to see where customer demand has shifted over time.

In 1998 there were 35 different SUV models available according to data gathered by Glass’s, and they fell into two distinct types. There was the large and expensive end of the market like the Land Rover Range Rover and Toyota Land Cruiser, or more utilitarian models from Isuzu, Mitsubishi and Daihatsu.

With the growing popularity in this segment, more manufacturers were taking note. Honda released the smaller CR-V and HR-V in the UK to rival the RAV4 from Toyota, and so the smaller SUV started to become more recognised on UK roads. They were often cheaper, but still retained the high driving position and four-wheel drive.

It soon became apparent that these cars were not often taken off-road, so new models launched featuring two-wheel drive, bringing costs down whilst also lowering CO2 emissions. The Nissan Qashqai typified this new wave of Crossovers, and by 2010 the number of SUV/Crossover models available had jumped to 60.

Mainstream manufacturers continue to increase offerings as the lines between body types blur more and more, and so we saw at least 100 different models available in 2020. Even sports car manufacturers recognize the opportunity, with Porsche launching the Cayenne in 2003, and in later years Maserati, Lamborghini and Aston Martin have joined the party along with Bentley and Rolls Royce.

As expected market share has grown too, otherwise manufacturers would not continue to grow their stable of SUV/Crossovers, as can be seen in the chart below where market share has grown from 4% to 35% of the UK market in 2020.

SUV/Crossover UK market share graph 1998-2020

With no likelihood of these trends ending soon, the return of the convertible to niche status seems inevitable, while the Crossover continues to sweep all rivals aside. That is not to say they have lost their appeal, in 2020 Glass’s average residual value for Convertibles rose significantly due to an uptick in demand as shown in the chart below. This will have been helped by extremely good weather, but also possibly due to people treating themselves to something as the global COVID-19 pandemic affected other areas considered a luxury, like overseas holidays.

Average RV% 3 yr old convertible/cabriolet graph 2020 vs 2019

Launch Report: Volkswagen Caddy – improved engines and specifications

The Volkswagen (VW) Caddy has been redesigned from the ground up, with improved safety, space, engines, and advanced driver-assistance systems (ADAS). The fit and finish, digital cockpit, and general specification improvements make the model feel more like a VW passenger car. The driving dynamics are very good too, with outstanding roadholding and vehicle stability, as well as a good level of comfort.

Both the Caddy and the Caddy Maxi have grown in length and wheelbase, providing more cargo space. As the model is bigger, the maximum payload is slightly lower, but is the highest among key competitors. However, the loading volume of the Caddy is slightly below average, with the cargo space allowing for just one Euro pallet (only the long-wheelbase Maxi version accommodates two), while most competitors take two in standard form.

The new model hosts a comprehensive offer of assistance systems, including trailer-assist, which is a unique selling point in the segment. The modern interior and digital cockpit are advantageous for dual-use customers, i.e. drivers that use the vehicle for both commercial and private purposes.

The latest Euro 6 diesel engines benefit from huge emissions reductions and better fuel economy, supported by the new double SCR (selective catalytic-reduction) system. The 102-horsepower 2.0TDI has the lowest fuel consumption and CO2 emissions among its key rivals. There is not a fully-electric version of the new Caddy available, unlike small PSA Group and Renault vans. However, a plug-in hybrid (PHEV) version is planned for 2022. A compressed natural gas (CNG) version is already available in France, and will be available to order in Spain from December 2021.

The Caddy has a lower entry list price than its predecessor, but pricing is generally higher than those of other mainstream competitors. However, the fuel savings and reduced CO2 emissions will improve running costs and should entice new buyers. Furthermore, the development of working-from-home, and closures of non-essential retail, have led to an increase in home deliveries, benefiting demand for vans, and their residual values (RVs).

Click here or on the image below to read Autovista Group’s benchmarking of the VW Caddy in France, Germany, Spain and the UK. The interactive launch report presents new prices, forecast RVs and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Used Car Market Update- February 2021

Used Car Auction Wholesale Market

At the beginning of February, it was still unclear how long this latest lockdown would continue, or how restrictions would be lifted or eased once it ended. Crucially for the UK used car industry, there was, therefore, no indication when showrooms and sales sites could open to “physical” customers.

The use of online selling and suitably distanced handovers has certainly helped dealers achieve more sales than would have been considered possible twelve months ago, but for many buyers, there is no substitute for actually seeing the car they are buying before they sign on the dotted line.

Therefore, it should come as no surprise that the used car wholesale market in February was relatively steady. Auction sale volume was slightly lower than in January, yet understandably was significantly lower than February 2020. Similarly, the first time conversion rate of 76.5% was only 1.7% lower than January’s score but over 12% lower than a year ago.

Used car market first time conversion rate graph February 2021

Used car market percentage of original cost new graph February 2021

_{Charts based on a representative sample of current UK auction data but excludes observations from British Car Auctions}

As usual, the cars that sold best were the ones in good condition, with the desirable specification. Without the need for restocking, there was even less desire than usual to buy cars that need work. It was noticeable that demand increased right at the end of the month following the announcements regarding the route out of lockdown.

Used Car Retail Market

Whilst February’s used car auction market was relatively steady, the used car retail market performed fairly well despite the ongoing lockdown. The number of observed sales were up almost 14% compared to January, as was the average sale value, albeit only by 2.3%. Unsurprisingly, the number of sales were almost 13% lower than for February 2020 but still promising given the challenging circumstances.

Used car market average sale price February 2021

The length of time a car spends on the forecourt is a good indication of its retail popularity, and it is one of the pieces of data that GlassNet Radar records. February’s average of 57.8 days was 6.1 days higher than for January and almost 15 days higher than the average stay in February 2020. This is not surprising given the current situation and is likely to improve once sales sites can open fully.

Used car market average days to sell February 2021

Outlook

The announcement towards the end of February of the phased lifting of lockdown restrictions led to an improvement in used car auction activity, and it is reasonable to expect that this will continue through March. The introduction of the new registration plate usually leads to an increase in auction activity towards the end of the month, however, Glass’s expects registration volumes to be significantly lower than in 2019 (the last “COVID-free” March!), and even last year, so demand may well exceed supply which should lead to a strengthening of hammer prices.

New Car Market Update February 2021

With the UK in lockdown throughout February, it comes as no surprise to see another drop in new car registrations, with dealers having to rely on ‘click and collect’ and telephone transactions only. A total of 51,312 new cars were registered in February, down 35.5% from last year, according to data published by the Society of Motor Manufacturers and Traders (SMMT). Underlining how poor February’s total was, the SMMT reported it was the lowest for the month in 52 years.

February’s deficit was a slight improvement on January’s 39.5% reduction. However, that is little comfort on such a small volume, in what is usually the quietest month of the year for sales, as consumers await the new plate in March.

Plug-in vehicles continued their upward trajectory with Battery Electric Vehicles (BEVs) and Plug-in Hybrid (PHEVs) taking a combined 13.0% market share for the month, up from just 5.7% in February 2020. BEV registrations increased by 40.2% to 3,516, and PHEVs by 52.1% to 3,131 as the motor industry continues to improve the choice and supply for consumers.

The contraction in registrations in February was more severe in the retail sector, down 37.3%, while fleet volume was down 33.5%. The fast disappearing business sector fell 56.6% to just 637 units. Over the first two months, the retraction in volume has been even across both private and fleet as shown in the chart below.

On 22 February, The Prime Minister outlined a roadmap for easing restrictions in England, with non-essential retail, including car showrooms, able to reopen no earlier than 12 April. In Scotland, this is expected from the last week of April. A review of restrictions in Wales conducted on 12 March was expected to announce that non-essential retail would be able to reopen as soon as 15 March, however, although some restrictions were relaxed, non-essential retail will remain close until 12 April. A timetable for easing restrictions in Northern Ireland has not been announced, although a review is planned for 16 March.

Glass’s expects another poor set of results for March 2021, which is usually the busiest month of the year. We may not see a huge percentage drop versus last year as March 2020 heralded the start of the first national lockdown, with dealerships closing towards the end of the month, which impacted registrations.

From April, as the economy opens back up, there is an expectation that we will see pent-up private consumer demand released, together with an uptick in fleet activity as many extended lease contracts end. This will provide a significant boost to registrations for the second quarter, kickstarting dealers 2021 new car campaigns.

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Fuel Type: Diesel

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Used Car Auction Wholesale Market

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