Fuel Type: Electric Vehicle (BEV)

No talks between Hyundai-Kia and Apple

Hyundai Motor Company is not in talks with Apple over autonomous electrically-chargeable vehicles (EVs). The companies ended wide-spread speculation over a potential collaboration on Monday (8 February) with a regulatory filing.

The announcement dealt a $3 billion (€2.49 billion) blow to the carmaker’s market value, with its stocks sliding by 6.2%. Kia, as the rumoured potential operational partner, saw a 15% drop on the stock market, equalling a $5.5 billion loss in value.

Cooperation requests

‘We are receiving requests for cooperation in joint development of autonomous electric vehicles from various companies, but they are at early stage and nothing has been decided,’ the carmakers said in an investor update, as reported by Reuters.

‘We are not having talks with Apple on developing autonomous vehicles,’ it confirmed. Autovista Group’s Daily Brief did contact Hyundai, Kia and Apple for further comment on this latest revelation, but no response was received prior to publication.

Rumours had been rife over the potential battery-electric vehicle (BEV) tie-up. ‘We are agonising over how to do it, whether it is good to do it or not,’ a Hyundai executive aware of the Apple discussion said last month. ‘We are not a company which manufactures cars for others. It is not like working with Apple would always produce great results.’

Collaborative company

Hyundai is well known for its collaborative efforts across the board. These include everything from sponsoring global EV challenges, to investing in autonomous vehicle start-ups and even getting involved in robotics. So, the supposed talks with Apple fell well within the possible activity of this cooperative corporate mindset.

Addressing the company at the start of this year, company chairman Euisun Chung outlined the importance of this approach alongside its effort to become a global EV powerhouse as it launched its Electric Global Modular Platform (E-GMP), which will power its new Ioniq line-up.

‘With the launch of new vehicles based on the recently-released, electric-vehicle platform, the E-GMP (Electric-Global Modular Platform), we plan to provide attractive eco-friendly mobility options that aptly reflect customers’ diverse tastes and needs at more reasonable prices,’ he said.

‘Furthermore, our hydrogen fuel-cell technology, recognised as the world’s most advanced, will be expanded to diverse mobility and industrial sectors to help achieve carbon neutrality under the ‘HTWO (Hydrogen + Humanity)’ brand.’

This focus on electrification and hydrogen falls into a wider automotive trend, which emphasises the need for zero-emission mobility alongside the digitisation of vehicles. The sector is developing greener, smarter cars not only to meet emissions targets but also rising customer expectations. Consumer are becoming increasingly enveloped by new technologies, with mobile phones capable of connecting to every aspect of their lives, so the automotive industry is left playing catch-up.

E-volution

The Quiet BEV-olution

The UK Government has an ambitious plan to stop the sale of new cars and Light Commercial Vehicles (LCV) with pure internal combustion engines. Originally due to come into force in 2040, the Government has brought forward the ban to 2030. Between 2030 and 2035, new cars and vans can be sold with internal combustion engines if they can drive a significant distance with zero emissions (for example, plug-in hybrids or full hybrids), and this will be defined through consultation.

Although other vehicles, such as motorcycles and Heavy Commercial Vehicles (HCV), will eventually switch to less polluting fuels, for the moment they are not subject to the current government plans. In itself, this is interesting as there are cleaner alternatives to diesel including natural gas, battery-electric and fuel-cell electric. For the two-wheel market, while there is a growing selection of electric machines on sale, the move to battery-electric is still in its infancy.  

With favourable company car taxation and an ever-growing selection of new models on offer with new technologies removing range anxiety, the battery-electric car revolution is gathering pace. In the used car market, work is ongoing to support the development of the used electric vehicle sales with further studies around the cost of ownership and usability of these vehicles.

The E-volving Used Market

Today, there are around 7,500 used battery-electric cars available to buy on the UK’s market-leading online advertising portal. Just fifteen months ago, when Glass’s conducted the same search, the number was just 1,500.

Used car buyers are starting to see EVs as an affordable option compared to traditional petrol, diesel and hybrid alternatives. According to dealers, the current sweet spot for many consumers buying used cars is around £5,995.

For consumers ready for the move to an EV at this price level, currently, there are just two models to choose from in any volume. These are the Renault Zoe and Nissan’s Leaf. Dealer forecourt prices start around £4,200 for a ten-year-old Leaf, but then there is often a battery lease cost on top of that starting at £80 a month. For some people, this is around what they might spend on fuel each month. Therefore, a low mileage user has to look very closely at other costs when switching to battery-electric, including the zero price road fund license, lower servicing costs and lower fuel costs. Some users will switch to enjoy the knowledge that they are reducing emissions in their neighbourhood, however many are unwilling to make such a gesture and still state range anxiety as a reason not to switch.

Residual value development

As one of the longest-running volume EVs in the UK, the Nissan Leaf is a good example to analyse used pricing trends. With a new model Leaf launched in 2018, there was a notable increase in first-generation used examples hitting the market through part-exchange. Despite a significant increase in volume, the average residual value of a five-year example increased. The following chart shows Glass’s trade value for the Nissan Leaf expressed as a percentage of original cost new price. This increase in value is due to a general increase in interest in EVs throughout 2019. This intensified further at the beginning of 2020 before levelling out as COVID-19 made its presence felt.

Average RV% of a 5yr old Nissan Leaf graph

Glass’s editors will continue to keep a close eye on the EV market, paying particular attention to the significant number of cars expected to enter used car channels over the next three years. New EV sales have risen sharply to company car users over the past 12 months, fuelled by the attractive benefit-in-kind tax rates. With few current incentives available for used EV buyers, there is concern that when these cars come to the end of their contracts, supply may outstrip demand, negatively impacting residual values.

Daimler to become Mercedes-Benz as it spins off truck business

Daimler is to undergo a fundamental change in its structure, spinning off its trucks business and renaming itself Mercedes-Benz. The move is intended to help the company unlock the full potential of its business in a zero-emission future.

Daimler Truck will become a listed company with a majority stake distributed to Daimler shareholders. Mercedes-Benz will continue to develop models for both the passenger car and van markets. Diverging the business will allow each unit to focus on new technologies that are impacting their respective sectors.

Signs of a shift in policy emerged last year when Daimler announced it was developing hydrogen systems for its trucks business while cancelling plans for fuel-cell-powered cars. As the commercial and car markets are likely to take different paths towards zero-emissions, each company will now be able to put funding and resources into its own development rather than share the pot and restrict development as a result. The split is expected to occur at the end of this year, with an extra-ordinary shareholder meeting in Q3 to discuss the final plans and obtain approval.

Corporate structure

‘This is a historic moment for Daimler. It represents the start of a profound reshaping of the company. Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs.’ said Ola Källenius, chairman of the board of management of Daimler and Mercedes-Benz.

‘Both companies operate in industries that are facing major technological and structural changes. Given this context, we believe they will be able to operate most effectively as independent entities, equipped with strong net liquidity and free from the constraints of a conglomerate structure,’ he added.

As part of a more focused corporate structure, both Mercedes-Benz and Daimler Truck will be supported by dedicated captive financial and mobility service entities. The company plans to assign resources and teams from its current Daimler Mobility business to both brands.

‘We have confidence in the financial and operational strength of our two vehicle divisions. And we are convinced that independent management and governance will allow them to operate even faster, invest more ambitiously, target growth and cooperation, and thus be significantly more agile and competitive,’ commented Källenius.

Sustainability needs

Daimler had been struggling in recent years, announcing a series of profit warnings and initially struggling with its CO2 targets following the introduction of the Worldwide Harmonised Light-Vehicle Test Procedure (WLTP). Last year, the company managed to turn things around, tripling sales of plug-in hybrid (PHEV) and battery-electric (BEV) vehicles, and forecasting that it met its emissions figures to avoid any EU-sanctioned penalties.

‘We will continue to push forward with our ’Electric first’ strategy and the further expansion of our electric model initiative. Based on our current knowledge, we expect to meet the CO2 targets in Europe again in 2021,’ said Källenius.

With separate CO2 targets for passenger cars and trucks, Daimler will be keen to keep up this momentum, especially with stricter EU regulations for 2025 and 2030. Therefore, separating its trucks business will give Mercedes-Benz more focus on ensuring it meets guidelines by focusing on its electrification plans.

Further strategy

In October, Daimler unveiled a raft of plans that would see Mercedes-Benz focus on the luxury market with a shift to electrically-chargeable vehicles (EVs). The company plans for the number of internal combustion engine (ICE) models it offers to drop 70% by 2030. Part of this plan could see its range of compact models decrease as it focuses its product portfolio on the most profitable parts of the market.

‘We intend to build the world’s most desirable cars,’ said Källenius at the time. ‘It is about leveraging our strengths as a luxury brand to grow economic value and enhancing the mix and positioning of our product portfolio. We will unlock the full potential of our unique sub-brands – AMG, Maybach, G and EQ. Our strategy is designed to avoid non-core activities to focus on winning where it matters: dedicated electric vehicles and proprietary car software. We will take action on structural costs, target strong and sustained profitability.’

By divesting itself of Daimler Trucks, the carmaker can now focus on expanding new technologies in the passenger car market, including expanding its EQ line-up of BEVs. It plans to increase its range in the shortest space of time, meaning product development resources and expertise will be shifted to electric-drive projects.

Germany: new-car registrations down 31% in January

New-car registrations fell by 31.1% in Germany during January compared with the same month in 2020. A total of 169,754 passenger cars were registered according to the latest figures from the country’s automotive authority, the Kraftfahrt-Bundesamt (KBA).

This aligns with the Autovista Group expectation of a return to year-on-year declines of about 30% in countries where dealers were closed for physical sales. Germany is the largest European market affected in January, with the restrictions currently in place until 14 February.

The German market was also hampered by the return to a 19% VAT rate since 1 January 2021, which had been reduced to 16% from 1 July to 31 December 2020. Autovista Group estimates that this change advanced about 40,000 new-car registrations into December 2020, when the market rose 9.9% compared to the previous reporting period. Furthermore, the shortage of semiconductors will have invariably disrupted some new cars’ deliveries in the country last month.

New-car registrations, Germany, y-o-y % change, January 2020 to January 2021

Germany registrations 2020-2021 so far

Source: KBA

There were two fewer working days in January 2021 than in January last year. On a comparable working-day basis, Autovista Group estimates that registrations fell by about 23% in the last month, and annualised new-car demand was at 2.94 million units. As in France, Spain and Italy, the start to 2021 of Germany’s new-car market has been deceptively shaky.

Given the mitigating factors in January, this bodes relatively well for the German market, which Autovista Group currently forecasts will recover to 3.15 million units in 2021, 8% up on 2020. This is at the same level as the German automotive industry association VDA forecasts. However, the VDA rightly highlighted that 2021 will still be ‘significantly lower than the approximately 3.5 million new registrations of the years 2017 to 2019.’

‘We assume that the second half of 2021 will bring an improvement, if the progress in vaccination is so great that the pandemic can be noticeably contained in everyday life,’ commented VDA president Hildegard Müller. This echoes the EU-wide sentiment expressed by the European Automobile Manufacturers’ Association (ACEA). ‘The year 2021 will decide the future of the industry in Germany and Europe. We are at a turning point that will set the direction for the following decades,’ Müller added.

Brands and segments

German brands reflected January’s negative performance. Audi (down 47.4%), Mini (down 41.5%), and Ford (down 41.1%) saw the most significant declines. Meanwhile, Porsche posted the smallest losses, with a drop of 3.9%. Volkswagen maintained the largest market share, of 20.1%.

Among the imported brands, Tesla and Volvo exceeded their registration results for the same reporting period in 2020, up 23.4% and 9.4% respectively. In contrast, declines of more than 70% were seen at Jaguar and Honda (down 77.9% and 70.1% respectively), while Fiat recorded the smallest decrease of 14.8%. Skoda was the strongest imported brand for market share, with 6.7% of registrations.

Motorhomes were the only segment to achieve growth, of 5%, to capture a market share of 1.9%. Meanwhile, small MPVs saw the most severe decline at 63.6%, and full-size MPVs fell 55.3%, sports cars slumped by 43.2% and utility vehicles dropped by 42%. SUVs were the strongest segment with 21.9% of the market, despite a decrease of 26.4%, followed by the compact segment with a 19.1% share, down 32.2%.

Fuel types

Registrations of petrol-powered cars fell by half (50.3%) in January 2021 compared to the previous reporting period, taking 37.1% of the market. Diesel also dropped by 44.8%, representing just over a quarter of new cars (26.1%). In contrast, electrically-chargeable vehicles (EVs) saw year-on-year growth of 117.8%, with a total of 16,315 new units registered, taking their share to 9.6%.

Some 45,449 hybrids were registered in January, up 47.5%, while securing 26.8% of the market. A total of 20,588 plug-in hybrid units were registered in January, up 138.3%, with a 12.1% share. Natural gas (259) and liquefied gas (340) only accounted for 0.2% of the market last month, recording a combined decrease of 35.5%. The average CO2 emissions of newly registered cars was 125.9 g/km, representing a decrease of 16.9%.

The tipping balance towards EVs, and away from internal combustion engines (ICE), follows on from a trend recorded last year. In 2020, alternative drives made up of hybrid, fuel-cell, gas, hydrogen, and battery-electric vehicles (BEVs), claimed approximately a quarter of all new-car registrations. The German government set out COVID-19 recovery plans as a springboard towards a greener economy, with a greater emphasis on electromobility. In November, it committed a €4 billion stimulus package to the automotive sector, with funds channelled into the adaptation of production lines and incentivising the purchase of EVs.

Semiconductor shortages stunt automotive recovery

Vehicles are becoming smarter by the day, from automation to personalisation. But a major building block in these digital developments has hit a bottleneck. Autovista Group Daily Brief journalist Tom Geggus explores the world of semiconductors. Why is there a shortage, which OEMs have been affected, and how could this impact an automotive COVID-19 recovery?

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Show notes

Semiconductor shortage disturbs manufacturing

Semiconductor shortage continues to impact automotive production

Germany looks to Taiwan for semiconductor solution

EU new-car registrations plunged 24% in 2020

Launch Report: Opel/Vauxhall Mokka-e – clean design with quick charging

The Mokka-e introduces Opel’s (and Vauxhall’s) new design language, which presents clean lines that give the car a premium appearance. The new ‘Vizor’ front is especially distinctive with the lights and radiator, including the new brand logo, forming one cluster. The distinctive two-tone bodywork, differentiating the bonnet and the roof, offers multiple possibilities to personalise the vehicle.

The acceleration of the Mokka-e is rapid compared to most competitors with similar power output, going from 0-100km/h in 8.5 seconds, and the 50kWh battery gives it a range of 322 kilometres on the WLTP cycle. If buyers opt for the 11Kw on-board charger, the car can be recharged, using a 100kW DC fast-charger, to 80% battery capacity in 30 minutes.

The new ‘Pure Panel’ dashboard stands out in the interior, featuring either a 10-inch or 12-inch touchscreen, but there are also physical controls for the infotainment system and climate control. Good price positioning is coupled with a high level of standard equipment from the entry-level trim upwards. Even the basic version of the Mokka-e is equipped with climate control, an automatically-dimming interior mirror, and a light and rain sensor as standard. ‘Eco’ or ‘Sport’ driving modes and adaptive cruise control are also included, as are ‘Keyless Start’ and ‘Opel Connect’, with which drivers can request data about the car remotely via smartphone.

Click here or on the image below to read Autovista Group’s benchmarking of the Opel/Vauxhall Mokka-e in France, Germany, the Netherlands and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Launch report Opel/Vauxhall Mokka-e January 2021

Automatic Revolution Update

The automatic revolution

Historically, automatic gearboxes were a rare beast on cars in the UK, usually reserved for the larger prestigious cars of the day, like a Jaguar or Rolls Royce. They were expensive options and did not suit smaller, low power vehicles.  Often considered sluggish, they usually had three gears and delivered poor fuel economy compared to a manual. They also tended to be expensive to repair, and had a reputation of being labelled as ‘not a true driver’s car’.

Times have changed, now automatics frequently have more gears than their manual counterparts, can be more economical, and many have racing-style steering wheel paddle shifters delivering a sportier more dynamic drive, when and if required.

Improving technology – increasing registrations

The chart below displays new car registration data from the Society of Motor Manufacturers and Traders (SMMT). The data shows registrations before 2018 favouring manual over automatic transmissions with registrations of automatic transmissions gradually increasing in market share from the start of the millennium to one in four cars by 2012. Since then the growth has been much faster, to the point where more than half of the cars registered in 2020 were automatic.

Automatic transmissions have gained ground against manual transmissions as technology has improved. Additionally, battery electric vehicles (BEVs) and hybrids are generally only offered with automatic transmissions. Taking account of electrified vehicle registrations and their year-on-year market share increases, the trend towards automatic transmissions will continue to grow.

UK car registration share by gearbox type graph

How have residual values fared over a similar timeframe?

The chart below shows the average residual value of three-year-old cars split by manual and automatic gearboxes, displayed as a percentage of original cost new price.

3 year old residual value % of cost new graph

Throughout the time frame in the chart above, there has nearly always been a premium for automatics. However, over recent years this RV premium has grown from around 2% to 4%, the exception being the Global Financial Crisis where markets including used cars were in turmoil. This trend is also seen in older cars, as shown in the chart below.

7 year old residual value percentage of cost new graph

Why has there been an increase?

Over the last twenty years, the sophistication and quality of automatic gearboxes continue to improve. These gearboxes are now available across almost all makes and models, and this improved choice has helped fuel the increase in registrations.  Indeed, as mentioned before some automatics are more efficient and produce less CO2 than their manual counterparts, meaning lower Benefit-In-Kind taxation. In recent years, the increasing popularity and supply of alternative fuel vehicles (AFVs) such as BEVs and hybrids also supports the switch from manual gearboxes.

Another reason automatics are increasing in popularity is the cost. The expense of an automatic option is now lower in percentage terms, against cost new price, compared to 20 years ago. This, therefore, boosts residual value percentages, especially when in high demand as they are today.

Underlining the increase in demand for automatics, driving habits continue to change. According to data published by the DVLA, under 4% of automatic-only driving tests were taken 13 years ago, this has now increased to nearly 10%.

More choice, improved technology, increasing penetration of Alternative Fueled Vehicles, combined with increasing traffic congestion, makes choosing an automatic more compelling than ever. Taking account of limited used wholesale supply, the Glass’s team believes automatic values will remain strong.

EU states commit to sustainable battery development

The European Commission has approved a second Important Project of Common European Interest (IPCEI) that will see €2.9 billion handed out to carmakers, suppliers, technology businesses and energy companies to support research and development in the battery value chain.

The European Battery Innovation project has been prepared and notified by 12 member states. It will see companies such as Tesla, BMW, Fiat Chrysler Automobiles (FCA), Northvolt and Enel X share the funding across four areas of the battery supply chain. The public backing is expected to help unlock an additional €9 billion in private investments, as the Commission seeks to vastly improve Europe’s standing in battery manufacturing. The overall project is expected to be completed by 2028, although each sub-project will have different deadlines within this timeframe.

Funding will cover the entire battery value chain, from the extraction of raw materials, design and manufacturing of battery cells and packs, to the recycling and disposal of units in a circular economy, with a strong focus on continued sustainability.

New technologies

It is hoped that the funding will spur the development of next-generation battery technology that can power vehicles while being produced with little or no impact on the environment. The Commission hopes that the IPCEI will help develop battery technology further, including technological breakthroughs in cell chemistries and production processes, all of which will be in addition to what the first IPCEI, established in 2019, will accomplish.

‘For those massive innovation challenges for the European economy, the risks can be too big for just one member state or one company to take alone,’ comments executive vice president Margrethe Vestager, in charge of competition policy. ‘So, it makes good sense for European governments to come together to support industry in developing more innovative and sustainable batteries. This project is an example of how competition policy works hand in hand with innovation and competitiveness.

‘With significant support also comes responsibility: the public has to benefit from its investment, which is why companies receiving aid have to generate positive spillover effects across the EU.’

Environmental impact

The big focus of the project is sustainability. There is increased awareness of the carbon impact of vehicle electrification, as it starts its big push for market domination. Taking over from fossil-fuel-based technology, and championing the sustainable position for the automotive industry, companies need to increase awareness of the entire production cycle and its impact on carbon emissions.

‘The batteries value chain plays a strategic role in meeting our ambitions in terms of clean mobility and energy storage,’ said Thierry Breton, commissioner for internal market. ‘By establishing a complete, decarbonised and digital battery value chain in Europe, we can give our industry a competitive edge, create much-needed jobs and reduce our unwanted dependencies on third countries – in short, make us more resilient. This new IPCEI proves that the European Battery Alliance, an important part of the EU industrial policy toolbox, is delivering, he added.’

Companies involved in EU battery value chain IPCEI

Companies involved in EU battery value chain IPCEI table

Source: European Commission

The project will involve 42 direct participants, including small and medium-sized enterprises (SMEs) and start-ups with activities in one or more member states. The direct participants will closely cooperate through nearly 300 envisaged collaborations, and with over 150 external partners, such as universities, research organisations and SMEs across Europe.

The Van’s Headlights: The Rise Of The MAXUS Brand

This month the Van’s Headlights looks at a commercial vehicle brand that is relatively new in its current form to the UK. It is catching the eye, not only with its latest vehicles but also with what is in the pipeline.

Although the name MAXUS may be new to a lot of people, its origins are deeply rooted in UK manufacturing history with links that can be traced back to 1896.

Background

In 1896, two local families founded the Lancashire Steam Motor Company in the town of Leyland, Lancashire. The company was renamed Leyland Motors in 1907 and later became the Leyland Motor Corporation (LMC), as they diversified into the manufacture of petrol-driven trucks, buses and electric trolleybuses. The company expanded further into car manufacturing, acquiring Triumph and Rover in 1960 and 1967. In 1968 LMC merged with British Motor Holdings to become British Leyland Motor Corporation (BLMC) with the company holding a 40% market share.

Although BLMC held household marques such as Mini, Jaguar, Rover and Land Rover within the group, management was poor, leading to its eventual collapse and part nationalisation in 1975. It was at this time that BLMC was restructured and renamed British Leyland. The company went through further name changes to BL Plc in 1978 and then The Rover Group Plc in 1986. By this time, marques including Austin, MG, Freight Rover and Leyland Trucks were part of the group as well as the dormant trademarks of Triumph, Morris, Wolseley, Riley and Alvis.

In 1987, Freight Rover and the Leyland Trucks division were sold to Dutch company DAF Trucks which was renamed DAF NV in 1989. The trucks were manufactured in Eindhoven and Leyland and the vans in Washwood Heath, Birmingham and sold under the Leyland DAF banner in the UK.

Following a management buyout in 1993, the Leyland DAF Van (LDV) company was formed. LDV produced the 200 and 400 Series and then the Pilot and Convoy until 2004 when, after several years in the making, the production of the all-new Maxus started. The new project was originally meant to be a joint venture between LDV and Daewoo, however, Daewoo went into liquidation in 2000.

MAXUS LDV pilot van green
MAXUS LDV Convoy van black

LDV soldiered on moving 6,000 tons of tooling from the Daewoo plant in Poland transferring it to Birmingham by road and rail to reduce costs. The Maxus eventually launched in 2004, but with the additional costs, LDV came under further financial pressure and went into administration briefly the following year. The company was saved in 2005 when US investors Sun Capital bought them.

LDV MAXUS range 3 vans

In July 2006, Sun Capital sold LDV to the Russian van maker, Gorkovsky Avtomobilny Zavod (GAZ) Group with a plan to expand production in Birmingham by adding new product lines and entering new markets. GAZ also planned to produce vehicles in Russia and sell an additional 50,000 units annually worldwide. However, due to the global financial crisis in 2008 and a lack of investment, GAZs plans never materialised.

Production ceased at the Birmingham factory in December 2008 when a last-ditch attempt to save LDV by the British Government and WestStar Corporation failed. LDV continued to sell its existing stock but was sold in 2010 to the Shanghai Automotive Industry Corporation (SAIC).

Renamed as the MAXUS V80 for the Chinese market and selected left-hand drive markets in Europe, the range was re-launched with only minor cosmetic upgrades.

LDV MAXUS V80 front side union jack

In 2015, The Dublin-based Harris Group secured the distribution rights to the MAXUS in the UK, Ireland, Channel Islands, Isle of Man, Malta and Cyprus. Utilising the strong historical links with the brand in these markets, the V80 diesel range and the EV80 electric variant were sold as LDV badged products.

Acclaim for LDV grew over the next five years, winning the Greenfleet LCV Manufacturer of the Year Award last year, whilst the EV80 also won the Motor Transport Clean Fleet Van of the Year.

It was also last year that SAIC revitalised the brand. Now distributing their products to almost 50 countries and regions across the globe, LDV was rebranded as MAXUS across right-hand drive Europe in a global realignment with the rest of the group. This change coincided with the launch of two new ranges that MAXUS hope will underpin the brand’s future.

If further proof was needed, Harris has confirmed its commitment to growing MAXUS operations in the UK by announcing its plans to open a headquarters during 2021.  Housing MAXUS’S UK employees, the new head office in Birchwood Park, Warrington will offer warehousing and a parts depot as well as office space.

The current offering

SAIC MAXUS Deliver 9 white van
MAXUS LDV EV30h van

The all-new Deliver 9 van range replaces the outgoing V80 and EV80 models, with both diesel and eDeliver 9 electric van and chassis variants available as part of the range. The smaller eDeliver 3 all-electric van range is available as a van and platform cab and designed to compete in the urban delivery market.

Huge investments in development, technology, specification and quality secures the MAXUS range as a genuine challenger to the established brands.

eDeliver 3Deliver 9eDeliver 9
– Vans and platform cab
– Short and long wheelbases
– Aluminium and polymer composite construction
– Two battery options – 35kWh and 52.5kWh
– Up to 151-mile range – WLTP combined
– 5-80% rapid charge in 45 minutes
– 7kW home charger gives 80% charge in 10 hours
– Maximum 6.3cu.m. load space
– Cruise control
– Infotainment system
– Comprehensive comfort and safety features
– Payloads up to 1,200kg
– 5yr/60,000-mile vehicle warranty
– 8yr battery warranty
– Priced from £24,000 plus VAT, after Plug-in Van Grant (PiVG)		– Short, Medium and long wheelbases at 3,500kg GVW
– Vans and derivatives plus custom vehicle conversions
– Two trim levels
– New 2.0-litre 163bhp Euro 6d compliant diesel engines
– Comprehensive comfort and safety features
– Infotainment system
– Ample storage, cup holders
– Load volume between 8.1cu.m.-12.3cu.m.
– Payloads up to 1,520kg
– 5yr/125,000-mile warranty
– Priced from £27,150 plus VAT		– Medium and long wheelbases at 3,500kg GVW (optional 4,050kg upgrade)
– Vans and derivatives plus custom vehicle conversions
– Choice of three battery options – 51.5kWh, 72kWh and 88.55kWh
– Range between 112 miles and 185 miles – WLTP combined
– AC and DC charging as standard
– 5-80% rapid charge in 45 minutes. 100% in 80 mins.
– 7kW home charger gives 80% charge in 10 hours
– Maximum 11cu.m. load space
– Payloads up to 1,200kg
– 5yr/60,000-mile vehicle warranty
– 8yr battery warranty
– Priced from £55,000 plus VAT, after Plug-in Van Grant (PiVG)

The Future

The future looks bright for SAIC. The largest automotive group in China, they currently employ almost 100,000 staff and produce almost seven million cars, vans, pickups, motorhomes and trucks each year.

The next vehicle to be brought in under the MAXUS banner is muted to be the T70 2.0TCDI diesel pickup, which again will be supported by a 5yr/125,000-mile warranty. There is also a T70 electric pickup available in home markets with a stated range of 535km (330 miles) and an 80% charging time of 36 minutes.

The 2020 Chengdu Auto Show saw the new MAXUS pickup officially revealed. Powered not only by a twin bi-turbo diesel engine generating 510Nm of torque, the aggressively styled pickup will also be powered by pure electric, hybrid, and fuel cell technology. The interior will feature twin screens with multimedia and 5G technology and a high level of specification.

In September last year, SAIC announced that they had created Jieqing Technology Co to provide fuel cells and engineering services for the automotive industry. The plan is to research, develop and sell in the region of 10,000 hydrogen vehicles per year and to exceed 30,000 units globally by 2025. The world’s first hydrogen fuel cell MPV called the MAXUS EUNIQ 7 has been launched in China, with its third-generation autonomous fuel cell technology being applied to future light and heavy trucks, buses and other commercial vehicles.

SAIC has the vision to be at the forefront of the automotive industry promoting new energy vehicles and technologies and is currently work closely with the Chinese Government, Shanghai Municipal Government and Shanghai Airport Group to improve the economic efficiency of hydrogen fuel production, storage and transportation. There are also plans for a new hydrogen infrastructure that will include over 1,000 hydrogen filling stations by 2030.

Podcast: The big tech trends of CES 2021

Which automotive technologies stole the spotlight at CES 2021? Autovista Group’s chief economist Dr Christof Engelskirchen, Daily Brief editor Phil Curry, and journalist Tom Geggus review some of the big tech trends at this year’s show.

They discuss the unveiling of new electric models, batteries and bases. How futuristic concepts like autonomous vehicles and VTOLs are taking off, the growth of infotainment systems and how this year’s digital platform changed CES.

https://soundcloud.com/autovistagroup/the-big-tech-trends-of-ces-2021

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.

Show notes

Five-minute-charge battery the answer to range anxiety?

CES 2021: The big automotive trends

CES 2021: Sono Motors unveils second-generation solar car

CES 2021: Panasonic looks ahead with augmented-reality HUD

CES 2021: Bosch focuses on sustainability and convergence

CES 2021: BMW showcases the latest iDrive system

CES 2021: Mercedes-Benz talks MBUX Hyperscreen

CES 2021: Indy Autonomous Challenge aims for extreme driverless testing

CES 2021: Mobileye to increase use of own autonomous technology by 2025

CES 2021: Magna champions LG venture as a new-entrant enabler

Five automotive tech advances to look forward to in 2021

Volkswagen Group narrowly misses CO2 targets

Volkswagen Group (VW) narrowly missed its EU CO2 fleet targets for 2020. The manufacturing group fell short, albeit by only 0.5 g/km, even after entering pools with other manufacturers like SAIC Motors bringing the average down to 99.3 /km. This will mean a fine for the company, for which it set aside provisions earlier on. VW did manage to lower its new passenger-car fleet emissions to 99.8g/km, a reduction of roughly 20% compared to 2019.

The German manufacturing giant points to two of its major brands, Audi and Volkswagen Passenger Cars (VWPC), as driving down fleet emissions with their respective electric offensives. Notably, the luxury brands Bentley and Lamborghini were measured individually, and so were not included in the overall fleet total.

‘We are making good progress on the road to becoming a CO2-neutral company. We significantly reduced the CO2 emissions of our new vehicle fleet in the EU,’ said Herbert Diess, VW CEO. ‘The Volkswagen and Audi brands in particular have made a major contribution to achieving this with their e-offensive. We narrowly missed the fleet target for 2020, thwarted by the COVID-19 pandemic. Along with Volkswagen Passenger Cars and Audi, Cupra and Škoda are now bringing out further attractive electric models. This will allow us to achieve our fleet target this year.’

Electric offensives

Both Audi and VWPC were able to meet their CO2 fleet targets, thanks in a large part to their electric offensives with the ID.3 and e-Tron respectively. Based on the Modular Electric Drive (MEB) platform, the ID.3 saw 56,500 deliveries last year. Roughly 212,000 electric VWPC vehicles were handed over to customers during the last 12 months, including some 134,000 battery-electric vehicles (BEVs). Meanwhile, the Audi e-Tron (including Sportback models) recorded a significant increase in demand in 2020, with year-on-year growth of 79.5%, up to 47,300 vehicles.

So, as BEV front-runners, Audi and VWPC represented increased traction for the group, which saw a fourfold increase in deliveries of electric models in the Europe, including the UK, Norway and Iceland. A total of 315,400 electrically-chargeable vehicles (EVs) were delivered in 2020, compared to 72,600 in the previous period. BEVs and plug-in hybrids (PHEVs) accounted for 9.7% of VW’s deliveries last year, up from 1.7% in 2019. The group therefore asserts this makes it ‘the clear market leader in the all-electric segment in Western Europe,’ given that it claimed a quarter of the market, up from a 14% share in 2019.

‘Despite very ambitious efforts in electrification, it has not been possible to meet the set fleet target in full. But Volkswagen is clearly well on its way,’ said Rebecca Harms, member of the independent VW Sustainability Council. ‘Work has to continue systematically to bring about the drive transformation and meet climate and sustainability targets. The key to success will be to give a greater role to smaller, efficient and affordable models in the electrification rollout.’

VW will step up its electric offensive this year with a large number of new BEVs based on the MEB platform. Audi will start 2021 with the Q4 e-Tron2 and Q4 e-Tron Sportback2. Meanwhile, Cupra will launch the el-Born2 and Škoda will deliver the Enyaq iV3. VWPC will launch its electric SUV, the ID.4, in a number of additional markets and present a new all-electric model.

Faster EV-charge points will help reduce charge anxiety

With the development of electrically-chargeable vehicles (EVs) driving forward at a pace, range anxiety will soon be a thing of the past. However, this could be replaced with charging anxiety, where consumers fear the infrastructure’s availability, the time it takes and the ease of use.

Therefore, developing EV charging is of equal importance to the market, in order to make consumers comfortable with the new technology. There is likely to be a push to create more efficient and easy-to-use charging posts that will benefit drivers and operators of charging sites.

Siemens is one company pushing development to meet these needs. The company has announced a new public fast-charger, named the Sicharge D, which is suited for highway and urban locations where drivers require a quick battery top-up, such as shopping centres and parking locations.

The post is capable of charging at up to 1,000 volts, with scalable charging power of up to 300kW and a peak efficiency range of 96%. This figure is helped by a dynamic power-sharing feature, which accounts for each connected car’s power demand and automatically adapts the charging process to the EV’s battery technology and charging status. This ensures that the connected cars get the maximum power they need without any additional manual intervention. 

Future proofing

The 96% efficiency rate means almost all the power picked up by the point from the grid is transferred to the vehicle, reducing wastage and helping to keep operating costs down for the operator.

Siemens is also aware of the need for charging points to adapt as charging capacities of EVs continue to improve in a developing market. This may mean that compared to today’s models, vehicles in the future could accept higher charging power and demand higher voltage ranges, especially if the battery is able to be recharged in a shorter space of time.

This demand is met through the scalable-charging power up to 300kW, either from the start of installation or through plug-and-play upgrades. Furthermore, the charger already supports voltages between 150 and 1,000 volts and currents of up to 1,000 amps across all DC outlets. This means it can cater for full-power loads for future 800 volt vehicles, as well as the lower-voltage charging rates demanded by current EVs.

‘With its upgradability and dynamic charging, it is a big step forward to support the future of electromobility. Our customers can be sure to be prepared for future eventualities of electromobility, be it an increasing number of required charging options or increasing charging speeds,’ said Birgit Dargel, global head of future grids at Siemens Smart Infrastructure. ‘At the same time, it is one of the most efficient fast chargers currently available on the market – an important aspect since building sustainable mobility requires careful handling of the scarce resources we are using.’

Reducing anxiety

The Sicharge D is an example of how technology companies are working to meet the demand for charging infrastructure through new efficient and future-proofed, fast-charging points. By making the post more cost-effective for the operator, more points can be added in a single location. Adding the ability to scale up the point to cover future technologies will also reduce the need to replace them down the line, while also ensuring drivers are able to rely upon them whatever their vehicle type.

Other companies are also likely to develop charging points that offer efficient charging and a user-friendly experience.

Five-minute-charge battery the answer to range anxiety?

Battery developer StoreDot has unveiled its first five-minute-charge battery engineering samples. Working on extreme fast-charging (XFC) technology, the Israeli company is aiming to eliminate range and charging anxiety for electrically-chargeable vehicles (EVs.)

Currently, rapid DC chargers offer some of the quickest charging speeds with a compatible vehicle. An example of this is Lucid Motor’s upcoming Lucid Air, which is reportedly capable of charging rates of up to 20 miles per minute when connected to a DC fast-charging network. Although, with a price tag of $80,000 (roughly €66,000) this luxury sedan’s battery technology cannot be considered widely accessible. If five-minute-charging technology could be introduced into the mass-market, this could remove several significant barriers to wider EV adoption; range anxiety, charge anxiety and wallet anxiety.

Ultra-fast charging

StoreDot is using this first production batch of sample cells to highlight the technology to potential industry partners. It will show OEMs how it replaced graphite in the cell’s anode with metalloid nano-particles, representing a breakthrough in safety, battery cycle life and swelling. In 2019, it demonstrated the full charge of a two-wheeled EV in just five minutes, as can be seen in the video below. 

Developed by Chinese company EVE Energy, StoreDot’s strategic partner, the sample cells do not require significant capital expenditure in bespoke manufacturing equipment. The XFC units are designed to be produced on existing lithium-ion production lines at EVE Energy. The samples are also compliant with UN 38.3, which ensures safety while shipping.

Doron Myersdorf, CEO of StoreDot, said the company is getting one step closer to making its vision of five-minute-charging times a commercial reality. ‘Our team of top scientists has overcome inherent challenges of XFC such as safety, cycle life and swelling by harnessing innovative materials and cell design. Today’s announcement marks an important milestone, moving XFC for the first time beyond innovation in the lab to a commercially-viable product that is scalable for mass production.’

With this, he looks to pave the way for the launch of a second-generation, silicon-dominant anode prototype for EVs later this year. Myersdorf explained; ‘we founded StoreDot to achieve what many said could never be done – develop batteries capable of delivering a full charge in just five minutes. We have shown that this level of XFC charging is possible – first in 2019 with an electric scooter and again six months ago with a commercial drone. We are proud to make these samples available, but today’s milestone is just the beginning. We’re on the cusp of achieving a revolution in the EV-charging experience that will remove the critical barrier to mass adoption of EVs.’

A charge a week

Technological developments like these work alongside the introduction of new EV models into the marketplace, demonstrating to consumers how committed OEMs are to electromobility. This appears to be working as a recent survey carried out by Tusker found that 63% of drivers are considering an EV for their next car. In November last year, the company-car supplier approached over 1,750 employed adults in the UK and found environmental benefits, home-charging and tax benefits all went a long way to swaying respondents.

Of those drivers who said they would consider an EV, 36% believed they could name up to three or more local charging locations they could use. The survey also revealed that 79% of the respondents admitted to driving less than 150 miles a week. The company claims this ‘means models like the Tesla Model 3 (263 miles – 423 kilometres), the Audi e-Tron (220 miles) and even the new Vauxhall Corsa-e (200 miles) will cater for a week of driver journeys on a single charge.’

Three-quarters of respondents believed EVs were within their budget, while the remaining quarter felt they were just for the wealthy. However, the company did point out that these vehicles are affordable on its salary-sacrifice scheme, ranging from £399 per month (€450) for a Tesla Model 3 to £249 per month for a Corse-e (inclusive of maintenance and insurance on a four-year agreement).

As consumers consider the benefits of alternative-ownership methods, alongside the practicality of owning and charging an EV, there is little doubt that advancements like a five-minute-charging time would go far to convince more people that electromobility is a viable option.

Vendor opportunities at online sales

One of the biggest step-changes in vehicle remarketing happened in 2020 as a result of COVID-19. To keep the used car market moving throughout lockdown, auction companies switched to an online-only sales model. Whilst nothing new for some companies in the sector, for most auctions, online business only accounted for a part of their sales. Whilst online buyer numbers have grown in recent years, full engagement was not predicted in the short term, with a significant hardcore of buyers still preferring to attend physically so they could touch and personally inspect the stock on offer for themselves.    

The result was surprising, strong online buyer engagement from the start. This grew quickly to the point where some auction groups are not planning to recommence physical auctions, as online-only has proved so successful. In the current climate with the COVID-19 pandemic dominating the way we live our lives, it is perhaps understandable that buyers will not want to mix with others in auction halls. Additionally many have seen the benefit of being able to access multiple sales across the country on the same day, increasing the pool of stock they can choose from, rather than committing to attend one physical site. Not to mention buyers no longer need to travel and stand in what can be at times very cold auction halls. That said, some auctions will continue to operate traditional physical auctions and these are likely to remain well attended.

The rapid increase in online engagement has also changed the way that trade buyers assess stock condition. No longer able to physically inspect vehicles for themselves, they now rely on photography, condition reports and auction grading.  As a result, vehicles with condition issues are easily highlighted, impacting hammer prices.

Many buyers shy away from vehicles towards the higher end of auction grades with condition issues, as it delays the time taken to get them on the forecourt, with grades 4 and 5 often achieving disproportionately lower bids. Most buyers appear content to bid in line with Glass’s trade value for grade 3’s and even more for grade 2 and 1. The question here is the potential opportunity for vendors to refurbish vehicles before a sale, to maximise their returns.

Analysis conducted by Glass’s shows the average price gap between a grade 4 and grade 3 condition car in 2020 was £510 as shown in the chart below, with the gap increasing in the second half of the year once the major auction groups switched to online-only.

Grade comparison graph 2019-2020

The analysis is based on auction observations gathered throughout 2020 but excludes the lockdown months of April and May. Glass’s analysed typical Fleet aged cars between 2.5 and 4.5 years of age. It is clear to see the opportunity is there for vendors to maximise their returns by refurbishing cars from grade 4 to grade 3.

 It is also evident that there is an opportunity to turn grade 3’s into grade 2’s, although in 2020 that was more pronounced following the end of Lockdown-1 and throughout the second half of the year. Whereas the gap between grade 4 and 3 is consistent throughout the year. Of course, refurbishment is an investment and costs vendors in terms of money and time. However, it is worth serious consideration as not only does it increase hammer prices it also enhances a vendor’s brand reputation, as buyers become used to improved condition standards being consistently offered.

Used Car Market Update December 2020

Used Car Auction Wholesale Market

Finally over, 2020 will be remembered above all for a certain virus that wreaked havoc around the world and across our global industry. For a whole year, COVID-19 has affected every aspect of our lives and it will have a clear effect on 2021. Lockdowns, mask-wearing and travel restrictions, unimaginable this time last year, have become part of our life and have unsurprisingly impacted the UK’s car markets.

New car registrations were down almost 30% due to reduced demand and severely impacted new car supply. Used car sales were also down, although it was good to see how quickly the used car retail sales switched to safely distanced online sales processes. Due to the various travel and gathering restrictions, auction providers suspended physical sales and now rely entirely on online auction portals. Fortunately, buyers adapted quickly and whilst overall sales volume for 2020 was down from 2019, first-time conversion rates and average sales prices were both up versus 2019 (3.6% and 20.6% respectively).

Overall sale volume 2020 versus 2019 December 2020

Specifically analysing December with Glass’s key metrics of first-time conversion rate and percentage of original cost new: the conversion rate of 72.4% was 5.2% higher than in November but almost 13% lower than the 85.3% achieved in December 2019. The average percentage of the original cost new was up 3.0% and 7.4% against November 2020 and December 2019 respectively. These results reflect the trends seen throughout the year, fewer cars selling with values holding up well. Given the circumstances, this is more positive than the expectations suggested.

First time conversion rate graph December 2020
Percentage original cost new graph December 2020

Despite their increasing popularity in the new car market, demand for HEVs (Hybrid Electric Vehicles) and BEVs (Battery Electric Vehicles) at auction continues to be lower than their ICE (Internal Combustion Engine) equivalents. Additionally, cars that require preparation work or are lack specification are also proving less desirable. This trend became more apparent as 2020 progressed. It appears buyers will still pay good money for the “right” stock, however, as times are more challenging, buyers are less keen to buy cars requiring additional preparation or that are outside of their comfort zones.

The graph below shows first-time conversion rate by fuel type and indicates that buyers are still more comfortable buying petrol and diesel cars rather than alternative fuel types. Petrol and diesel-powered cars achieve virtually the same conversion rates, with hybrids scoring a lower value and BEVs most susceptible to changes in supply and demand.

First time conversion rate graph split by fuel type December 2020

Used Car Retail Market

December is traditionally a three-week month due to the festive break. With the challenges of the November lockdown in England and other restrictions across the UK, the number of used car retail sales was 7.9% lower than December 2019 and increased 9.4% versus November 2020. Interestingly, whilst the average sale price was not too dissimilar to the averages for November 2020 and December 2019 – 1.5% higher and 0.8% lower – the average age of the cars sold, at 49.4 months, was 1.8 months younger than November but a notable 9.4 months older than in December 2019.

Used car retail market observations December 2020
Average sale price graph December 2020

Glass’s Live Retail pricing tool measures the length of time a car spends on the forecourt. This is a useful barometer of the state of the used car retail market – the days to sell are lower when there is good demand and higher when times are tougher.

The average in December was 45.5 days to sell. This was 7.6 days longer than in November, but only 0.8 days longer than in December 2019, so in keeping with the time of the year. To achieve these sales, the average discount required was also higher in December than in the previous month, up from 2.5% to 3.1%, but still favourable when compared to the 3.7% average discount for December 2019.

Average days to sell graph December 2020

Used car sales outlook

With the UK once again in a state of lockdown, the UK’s used car market has got off to a subdued start. The rollout of the vaccination programme and the agreement of a Brexit deal will help promote a degree of positivity and should translate into a recovery of the markets, although this will not be truly apparent until the second quarter of the year.

New car registrations were 29.4% down in 2020 from the total achieved in 2019 and whilst volumes will recover through 2021, registrations are unlikely to achieve “normal” levels this year. There are concerns that the significant reduction of registrations in 2020 will decrease the supply of sub 24-month-old “nearly new” vehicles, particularly diesel-powered cars. This concern is illustrated by the 2020 market share for diesel. The diesel market share decreased from 25.2% in 2019 to 16.0% in 2020 and equated to a 55% drop in volume. Petrol-power also saw large drops – although not to the same scale – which will also lead to a shortage of supply.

Alternative fuel vehicles

New car registrations in 2019 were primarily driven by availability rather than demand. Therefore the apparent swing towards alternative fuel should be viewed with a degree of caution. It is true to say that the market is undoubtedly moving away from pure ICE to alternative fuel vehicles, but 2020 was not a normal year and makes valid conclusions difficult to make. Indeed, 2021 may see supply distorted again, potentially in favour of ICE as manufacturers attempt to catch up on deliveries delayed from last year. However, with the increasing availability of PHEVs, HEVs and BEVs these powertrains will likely continue to take market share from traditional ICE variants over the coming months and years and continue to change the availability of fuel types at auction.

Moving forward, what can be said with a fair degree of certainty is that 2021 is going to be another “fascinating” year for both new and used car sales, with a much higher percentage of online sales than ever before.

CES 2021: The big automotive trends

There were plenty of automotive products and systems taking centre stage at CES 2021, which took place entirely online. Autovista Group Daily Brief editor Phil Curry and journalist Tom Geggus discuss developments from the show across the themes of electromobility, autonomous technology, infotainment and personalisation.

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Launch Report: Ford Mustang Mach-E – attractively positioned

Ford has used the Mustang name to widen the appeal of the new Mach-E electric SUV. The model incorporates some Mustang design elements, such as the light signatures, and there is not a Ford badge anywhere on the car, just the Mustang logo. The car is quite attractive by SUV standards, and the roofline is disguised using the body colour instead of black, giving it more of a coupé profile. There are many quirky touches, such as replacing the door handles with a digital button on the B-pillar that activates when the key is detected.

The Mach-E has a spacious, modern interior with an upright 16-inch touchscreen and a 10-inch digital screen in front of the driver, which helps keep the eyes on the road. Standard equipment is comprehensive and the large boot is supplemented with storage space in the front for the charging cable, for example. The model is nice to drive and handles well due to its convincing chassis, the ‘one-pedal’ driving mode is well calibrated, and the engine braking is very efficient. The claimed range is very good, especially for the extended-range rear-wheel-drive version, which manages 610km under the WLTP test cycle.

The Mustang Mach-E is not a cheap car, priced similarly to the Tesla Model 3, but has interesting positioning. It is larger and more powerful than offerings from volume manufacturers, such as the VW ID.4 and Skoda Enyaq, but at a higher price point, and is less expensive than similarly powered and sized premium models like the Jaguar I-Pace, Audi e-Tron and Mercedes-Benz EQC.

Click here or on the image below to read Autovista Group’s benchmarking of the Ford Mustang Mach-E in France, Germany, and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Mustang dashboard

Upbeat outlook but not without challenges

1.63 million new cars hit UK roads in 2020 according to figures released by the Society of Motor Manufacturers and Traders (SMMT). With over 680,000 fewer cars registered, 2020 produced the lowest annual registration total since 1992.

The national lockdown between March 23rd and June 1st accounted for a significant proportion of the losses, with the market down over 615,000 units by the end of June. A further lockdown in England in November, together with enhanced restrictions periodically affecting the other three nations of the UK, added to an already challenging new car market. Dealers introduced ‘click and collect’ services part way through Lockdown-1, and enhanced online sales solutions enabled dealers to satisfy pent-up demand. These developments will already be paying dividends as the UK once again finds itself in a national lockdown, expected to last until the beginning of March at the earliest.

The wholesale used car market was somewhat subdued in December, with little evidence of a serious bounce-back following November’s lockdown. That was not surprising as December tends to be one of the weaker used car retail months, with Christmas shopping higher on the public’s priority list. The first-time conversion rate was slightly better than November’s at 72.4%, although that was almost 13 percentage points lower than December 2019.

As we look to the year ahead and consider what is in store for the new and used car markets, COVID-19 remains the biggest challenge. Thankfully, the UK Government achieved an 11th hour Brexit trade deal, averting import tariffs, so that is one less problem for the new car market to contend with.

It is encouraging to see the rapid roll-out of COVID-19 vaccines, however, it is likely to be several months before the UK sees significant coverage, making further restrictions likely. The identification of a new, more easily transmissible variant of COVID-19 is a worrying development and has led to the latest national lockdown. This will undoubtedly affect new car registrations in at least January and February, and the impact will be considerable when compared to last year’s numbers, as the effects of COVID-19 did not impact that period. As we move through March and into the second quarter, which last year was badly affected due to Lockdown-1, registration totals should begin catching back lost ground and by year-end could reach around the 2 million mark.

The used car market should burst back into life once the Government gives a firm indication that the latest lockdown is to end. Until then, Glass’s expects continuing lack-lustre activity. Despite the challenges that lay ahead, the outlook for the used car market remains upbeat, with no crash in used car values expected.

Used-car markets and RVs under limited pressure in 2021

Senior data journalist Neil King explains Autovista Group’s key predictions for the year ahead, focusing on used-car demand and residual values in this second part.

Europe’s big five markets all suffered double-digit declines in new-car registrations in 2020, but used-car transactions exhibited more resilience. The exception is Italy, which suffered the same year-on-year in used-car transactions in Italy as new-car registrations, 27.9%, according to industry association ANFIA.

In contrast to the dramatic 29% decline in new-car registrations, used-car transactions in Spain declined by 12.8% in 2020, to 1,963,053 transactions, according to GANVAM, the Spanish dealers’ association.

‘The used-car market in Spain is always more favoured than the new-car market in times of crisis. Sales fell by only 13% in 2020, and the age structure of these sales has changed substantially in recent months and will continue to do so throughout 2021. The most notable change is undoubtedly the lower prevalence of young used cars in the market, caused by the standstill in tourism and the lack of renewal of rental fleets. In 2021, we also expect a greater share of electric vehicles in the used-car market, which accounted for just 0.2% of total sales in 2020,’ explained Azofra.

In the UK, used-car sales data are not yet available for full-year 2020, but the country’s used-car market contracted by 17.5% year-on-year in the first three quarters. Autovista Group estimates that used-car transactions were 15% lower in the year as a whole. This is only about half the contraction suffered by the new-car market. Used-car transactions are naturally expected to improve in 2021, but with a lower growth rate than new-car registrations.

Used-car transactions in France declined by a modest 3.8% in 2020, compared to a 25.5% fall in the new-car market, according to industry association CCFA. ‘The demand for diesel cars on the used-car market is still high while the supply is lower and lower, but petrol sales, which account for about 40% of total used-car sales, reached a maximum in 2020,’ explained Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux. Limited growth, if any, is therefore expected in 2021.

Slight improvement for Germany

Even in Germany, where the used-car market declined by only 2.4% in 2020, according to the KBA. Schwacke expects a slight improvement in used-car sales compared to 2020. ‘The used-car business was quite successful over the past 12 months under the circumstances and sold slightly more than seven million cars by the end of the year. The forecast for 2021 is the same – around seven million cars,’ commented Andreas Geilenbrügge, head of valuations and insights at Schwacke.

Europe: new-car registrations and used-car transactions, year-on-year % change, 2020

Sales in EU 2020

Source: CCFA, KBA, ANFIA, GANVAM, SMMT

(Note: UK is estimated, based on the latest data)

RVs grow in 2020, face limited pressure in 2021

Autovista Group’s COVID-19 tracker shows that the index of residual values (RVs) finished 2020 at or above pre-crisis levels in all of Europe’s major markets. The measurements began in February, with an index value of 100.

COVID-19 Tracker index of RV 2020 graph

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

Residual values have peaked, however, and have declined in recent weeks. Looking to 2021, ongoing COVID-19 restrictions and the economic impact, as well as the aversion to public transport, will support used-car demand. Autovista Group therefore predicts that residual values will only come under limited pressure.

Spain: difficult year

The tax rise in Spain, with the introduction of WLTP-based emissions figures, and the end to the RENOVE scrappage scheme will hinder new-car demand and means RVs may increase slightly in value terms in Spain, but a 1.1% decline is forecast in terms of trade percentage, i.e. value retention, in the standard 36-month/60,000km scenario.

‘We foresee a difficult year for the sector, especially in terms of new-car sales. However, used-car sales will resist the onslaught of the crisis better and only their average residual values will be slightly affected.’ Azofra emphasised.

‘Electric vehicles will experience greater pressure on their transaction prices in the used-car market. On the one hand, their price is still very high, which is an important market barrier, even more so in crisis circumstances such as the present. On the other hand, demand is trying to be stimulated through incentive schemes, so it will be difficult to maintain their used-car price. In addition, the recharging infrastructure is still insufficient, the poorest in the big five European countries, which reduces their development space in the used-car market. With regard to the rest of the engines, we estimate small negative adjustments in petrol and diesel vehicles and greater stability for hybrid engines, which are in increasing demand.’

The end to Brexit uncertainty could serve as a positive for the UK’s new-car market, but deliveries may be affected and price rises are expected as the share of components in some engines will invariably exceed the ‘locally-sourced’ threshold. It is an incredibly difficult call but Glass’s, the UK arm of Autovista Group, forecasts a 1.4% decline in the RVs, in trade percentage terms.

Schwacke points out that fleet registrations from 2017/2018 declined somewhat in Germany and there were also almost 400,000 tactical registrations less from 2020, of which usually two thirds are sold to end customers as young used vehicles in the year after first registration.

Stable demand

‘In view of the expected stable demand, this is definitely a plus point for price development in the coming year, but supply volume will probably struggle,’ said Geilenbrügge. The return to a 19% VAT rate on new cars will also affect RVs, but a modest decline of 0.7%, in trade percentage terms, is forecast for used cars in the 36-month/60,000km scenario.

The tax changes in France, which penalise petrol cars more than diesels, and incentives for EVs present a mixed picture. ‘In 2021, there is a clear risk of having a new-car market in contradiction with the used-car market. For CO2 reasons, the fuel types that are driving the new-car market are not the most attractive ones on the used-car market. Lower supply will reduce the RV pressure on petrol cars, and the sales stop of powerful diesel engines, which are well demanded on the used-car market will especially support RVs of these specific vehicles. The high prices and bonus for EVs still impacts RVs, especially at 12 months, but the €1,000€ bonus reduction in July 2021 will support RVs more positively,’ explained Taitz. Overall, the latest RV outlook for France calls for a minimal drop of 0.4% in the prices, in trade percentage terms, of used cars.

The poorest RV outlook is in Italy, where used cars have not weathered the COVID-19 storm better than new cars and the introduction of additional incentives for new cars will apply more pressure on used-car demand and residual values. RVs of used cars in the 36-month/60,000km scenario are currently forecast to fall by 3.9% in trade percentage terms.

In a first part, King discussed Autovista Group’s predictions for new-car registrations in Europe’s major markets in 2021.

COVID-19 and other market factors breed caution for 2021

Europe’s big five markets all suffered double-digit declines in new-car registrations in 2020 and the magnitude of the recovery in 2021 fundamentally depends on the duration and severity of restrictions to tackle COVID-19 and the accompanying economic impact. Automotive-specific factors will also determine the extent to which markets bounce back in 2021. Senior data journalist Neil King explains Autovista Group’s key predictions for the year ahead, focusing on new-car registrations in this first part.

Despite the new-car market stability in December, Spain still contracted more than the other major European markets in 2020. This does not automatically mean it will enjoy the highest level of growth in 2021. The end of the RENOVE scrappage scheme on 31 December 2020 and higher, WLTP-based registration taxes from 1 January 2021 pulled demand forward into 2020. Furthermore, with no improvement in Spain’s crucial tourism sector, and therefore the wider economy, envisaged in the near future, new-car registrations in Spain are expected to recover at a slower rate than in the leading European markets, except Germany.

‘A very tough first half of the year is expected, and a start to the recovery in the second half of the year. In any case, the recovery will be slow, and we do not expect new-car volumes to reach figures similar to those of 2019 for at least three years,’ commented Ana Azofra, valuations and insights manager at Autovista Group in Spain.

The recovery in Germany is forecast to be rather limited, not only because it starts from the highest base, declining by only 19% in 2020, but also as new-car demand will be slightly hampered by the return to a VAT rate of 19%, up from the reduced rate of 16% that was in effect from 1 July to 3 December 2020. The smaller quantities of newly launched high-volume vehicles in 2021, and the reduction in the range of products due to the threat of CO2 fines, will also have an impact. However, regained production capacity, as well as the significantly lower availability of very young used cars, should act as positive effects. Autovista Group’s Schwacke is cautiously optimistic for 2021 and forecasts a recovery to just under 3.1 million units, equating to growth of 6%.

New-car registrations, major European markets, year-on-year % change, 2020

New-car registrations, major European markets, year-on-year % change, 2020 graph

Source: CCFA, KBA, ANFIA, ANFAC, SMMT

Post-Brexit Britain, incentivised Italy

The declines in new-car registrations in Italy and the UK in 2020, were 27.9% and 29.4% respectively. However, new-purchase incentives introduced in Italy and the end to Brexit uncertainty in the UK, which compounded the effects of COVID-19, will provide a positive impetus to demand in 2021.

Autovista Group’s latest base-case forecast predicts a 25% improvement in UK new-car registrations in 2021, to just over two million units. However, this is predicated upon vehicle deliveries being largely unimpaired by post-Brexit disruption after any short-term teething problems, and the car market being able to recover from the current lockdown, together with any further restrictions that may be imposed later in the year.

‘Import delays at the port of entry will reduce UK registrations in Q1 and Q2 2021 and manufacturers are still not producing cars at full capacity due to COVID-19. The UK is also in lockdown but click-and-collect will help some car registrations, with the November 2020 volumes highlighting the need retail customers still have to kick tyres,’ said Anthony Machin, head of content and product at Glass’s.

The recovery is not expected to be as pronounced in Italy, but the new incentives will certainly help to drive the recovery.

Fuelling France

The French new-car market contracted slightly less than Italy and the UK in 2020, by 25.5%. In addition to the COVID-19 effect, the market was impacted by tax changes that were introduced in March 2020 and especially penalise petrol cars. These negative influences should dissipate during 2021 but the reduction in incentives for electrically-chargeable vehicles (EV) and the threshold for the environmental ‘malus’ (penalty), along with a higher penalty ceiling, will suppress demand.

‘Despite a more favourable malus scheme for diesel cars on the new-car market, I do not expect a diesel sales increase in 2021 and I expect lower petrol sales. However, OEMs are pushing battery-electric vehicles (BEVs) on the new-car market for CO2 reasons and the number of plug-in hybrids (PHEVs) increased a lot in 2020, a rise that will continue in 2021. Hybrids also offer a real alternative to petrol cars as they are cheaper than PHEVs, the electricity usage is simpler and, in terms of taxation, they offer the same benefits,’ explained Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.

In a follow-up article, King will discuss Autovista Group’s predictions for used-car demand and residual values in Europe’s major markets in 2021.