Fuel Type: Petrol

Used Car Market November 2020

Used Car Auction Wholesale Market

With the UK once again in lockdown throughout November – to varying degrees and duration depending on where you live – it was inevitable that the used car market would be affected. Fortunately, businesses and the buying public were better prepared this time around with the impact not as severe as it could have been. However, all three of the key measures – first-time conversion rate, percentage of original cost new, and sales volume index – were lower than in October. At 68.8% the first time conversion rate was 14.1% lower than in October and 16.4% lower than November 2019, whilst sales volume was also significantly reduced. The average percentage of original cost new achieved was less affected, down only 3.6% month-on-month and 1% higher year-on-year. This suggests that whilst fewer cars were selling, they were still achieving similar values.

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

Whilst auctions were not quite as busy during Lockdown-2, our Editorial team noted that buyer behaviour was generally the same as the month before. Cars that had condition grades towards the upper end of the scale and requiring work were out of favour, only selling if they represented a real bargain, often struggling to attract any bids at all. Desirable stock remains popular, and feedback suggested that late plate cars performed better than would usually be expected. This is likely to be, at least in part, due to this year’s much lower new car registrations and the extended lead times for new car supply – both factors that make an “almost new” car a more appealing prospect than it may have been in more “normal” times.

Despite the substantial growth in registrations of alternative fuelled cars in the new market, it appears that the used market is yet to catch up. As the chart below shows, the first-time conversion rates for hybrids and BEVs continue to lag behind those of ICE cars, and it is particularly surprising for BEVs due to their relatively low volumes in the auction environment. This may be due to the buyers of used cars tending to be warier of change, preferring to spend their hard-earned money on a car with a more familiar propulsion system, but it could also be due to the types of BEVs that are available on the second-hand market.

Most feature older generation technology, with real-world ranges of less than 120 miles, and whilst in reality that would be suitable for many (assuming they can charge it at home), it requires a leap of faith to move away from a petrol or diesel car that will comfortably travel 500 miles or more on a tank of fuel. It is not helped by the fact that their new contemporaries often have two to three times the range, and so many may well be adopting a “wait and see” approach to the purchase of their first second-hand battery electric vehicle.

first time conversion rate fuel split graph November 2020

Used Car Retail Market

It should come as no surprise that used car retail sales were down markedly in November – 32.7% less than the preceding month and 34.0% lower than November 2019. This is undoubtedly a result of the travel and contact restrictions resulting from the second lockdown, although the average value of those completed sales was 0.1% higher than that recorded for October and 4.7% higher than the same month last year. Impressively, whilst their average value increased, the average age of the cars sold also continued to increase, up to 51.3 months from the 48.6 months recorded for the previous month and 40.5 months for November 2019.

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

Glass’s Live Retail pricing tool shows that, despite the challenges faced by the used car retail market in November, the average time a car spent on the retail forecourt was 38 days, only 2.5 days longer than in October but 4.4 days less than the 42.4 recorded for November 2019. The average discount required for the sale continued to be less than for the same month last year, down to 2.5% from 3.4%. This did represent an increase over the 1.8% recorded for October, but given the circumstances, it is still impressive.

Used car market average days to sell graph November 2020

Next Month

December is usually a “challenging” month for the UK used car markets, with Christmas somewhat of a distraction and effectively making it a three-week month. For 2020 we have the added complexities of the Coronavirus-related restrictions so it is reasonable to expect a continuation of the trends seen in November. The looming spectre of Brexit and the possibility of a tariff-driven increase in the cost of new cars may help to promote the sale of younger used cars, but as that is still an unknown at the time of writing it must be added to the list of possible factors. Some buyers may well hold off on a used car purchase until the New Year, but the one thing we have learnt from 2020 is that it is anything but predictable!

Positive outlook for used car sales in 2021

With Brexit trade deal negotiations still unresolved at the time of writing, and COVID-19 an ever-present danger, the outlook for the new car market in 2021 looks gloomy. The prospect of an import tariff on new cars coming from the European Union, could have a severe impact on sales rate. Enhanced Customs processes and other red tape will also hamper stock availability. Stock issues could be exacerbated should European manufacturers lower their UK sales expectations and reduce the production of right-hand-drive cars.

The challenges for the new car market do not end there, with the prospect of further lockdowns a possibility as COVID-19 continues to make its presence felt. There is hope on the horizon now that a vaccine is beginning to be rolled-out, however, it will take several months to administer. Consumer confidence has taken a knock this year and the threat of more redundancies could also negatively impact new car sales.

On a more positive note, regardless of the outcome of free-trade talks and the fight against COVID-19, Glass’s expects registrations in 2021 to be higher than this year, now that dealers have developed ‘click and collect’ and other delivery strategies. During the latest lockdown, in November, registrations fell by 27.4% compared to last year, which whilst severe, was a vast improvement on the 97.3% and 89% drops in April and May during Lockdown-1.

The outlook for the used car market is not gloomy at all. In fact, Glass’s is reasonably optimistic that 2021 will be strong. This year has not been without its challenges but the used car market has proven to be very resilient, helped by the British public’s desire to change their cars, no matter what, so a level of demand remains throughout the toughest of times.

Add to that the prospect of new car price increases coupled to the potential for new car supply constraints and used car demand could rise further, further underpinning residual values. Glass’s expects the used car supply and demand dynamic to be reasonably balanced. There is the prospect that a volume of lease cars that were previously extended will come back into the market next year, which could put extra pressure on remarketing channels, however fresh extensions caused by new car supply issues and economic uncertainty will likely balance that. Consequently, Glass’s expects no crash in used car values in 2021.

New Light Commercial Vehicle (LCV) Market November 2020

The light commercial vehicle (LCV) market grew for the third consecutive month in November, with the 28,541 registrations reducing the deficit to 2019 to a smaller 21.5%. The 8.8% increase in registrations versus 2019 was driven by increases in all sectors apart from the 4×4 sector, ahead of an expected busy run up to Christmas.

The second countrywide lockdown, social distancing measures, redundancies, Brexit and possible vehicle tariffs will continue to affect LCV demand for the remainder of this year and well into 2021.

New registrations LCV market graph November 2020

Year-to-date registrations to the end of November stand at 265,374 units compared to 338,227 units in 2019. Breaking the month down by sectors reveals that registrations for vans under 2.0 tonnes, vans between 2.0-2.5 tonnes and vans between 2.5-3.5 tonnes increased by 13.7%, 13.6% and 25.2% respectively. Turbulent times for the Pickup sector continue as registrations declined again, this time by an alarming 56.2%.

Top five LCV registrations

Top five LCV registrations November 2020

The quarter four SMMT LCV registration forecast for 2020 has been issued, revealing an increase of 6.6% to 288,000 units. With a current shortfall of just over 22,600 units, the new prediction would seem achieveable with one months registrations to account for. Historically, December would be recognised as a quieter month, but with many operators eager to purchase new stock before any further lockdowns or potential Brexit tariffs are imposed, it is likely to be a busy month.

At the end of November, UK registrations remained 72,853 units down on the same point last year. The stop start nature of the pandemic restrictions has, and continues to affect many businesses. Although the rise in registrations over the last three months has been a welcome boost to the economy, the final registration total is still likely to be in the region of 45,000-50,000 units short of last year.

The interconnected nature of the UK economy means that there should be caution as the country emerges from the latest lockdown. With Brexit still undecided, the strong performance of the last three months should not be taken as an improving trend. The coming months will bring opportunities and challenges in equal measure.

November Used Light Commercial Vehicle (LCV) Overview

Performance in the LCV auction market remained strong in November despite the second lockdown in England. High bids continued for retail-ready stock with a lack of quality fuelling demand in the busy home delivery run up to Christmas. Traders and dealers are now adept at utilising online tools proactively, changing the emphasis between physical and digital activity at regular intervals. Traders are now offering ‘flexi-deals’ on their stock in an effort to attract new business and to maximise profit opportunities.

The limited volumes of new stock available, leasing companies have also been looking at alternative revenue streams, with many now incentivising existing customers to extend their current contract on much cheaper rentals.

The sustained appetite for retail-ready stock shows no sign of fading. Auction houses reported that Euro 6 stock made up over 35% of all LCVs sold at auction during the disrupted month of November, with an 88.0% first-time conversion rate. Many of these units supported the move to home shopping during the pandemic together with the increase in deliveries in the run-up towards Christmas.

The outlook is for prices to remain high as demand for essential services such as food; medicines, courier and construction remain strong.

November in detail

Glass’s auction data results show the overall number of LCV sales in November declined by 17.9% versus October 2020 and 10.0% over the last twelve-months. First-time conversion decreased 1.2% overall, with the 4×4 sector most heavily affected. Nevertheless, a healthy 88.7% first time conversion rate was up 4.0% versus November 2019.

The lockdown month of November saw average sales prices decline by 9.5% versus October, but were still 30.4% higher than the same point last year – the third highest in the last twelve months. The average age of sold stock rose from 72.4 months in October to 73.5 months in November, but was still 3.7 months younger than the same point last year.

In line with this older vehicle age profile, average mileages for sold vehicles increased from 73,438 miles in October to 78,205 miles in November. The November average mileage is still 4,674 miles lower than at the same point last year.

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

Launch Report: Hyundai i20 – sportier and more attractive

The third-generation Hyundai i20 has a stronger, sportier, and more attractive design, with tight lines and a prominent rear-quarter window, reveals the latest model launch report from Autovista Group. The model is longer and wider, which translates into more interior roominess and a 352-litre boot, which is among the largest in the B-segment.

The level of standard equipment is high and so the i20 has a very limited number of individual options available. This makes it easy for customers to configure vehicles and leads to many well-equipped used cars. The digital instrument cluster and central touchscreen in particular support the attractiveness of the interior, and strike a good balance between too many buttons and too few.

The report notes that the engine offer is rather limited, with only two petrol engines and no diesel, electric or full-hybrid versions. There is a mild-hybrid (MHEV) version but this has a battery in the spare-wheel well, reducing the boot volume to 262 litres.

The B-segment is very competitive and the i20 faces strong rivals, such as the Opel/Vauxhall Corsa, Renault Clio, SEAT Ibiza and VW Polo. Given that the segment is mainly driven by price considerations, the list prices of the i20 are rather high. In Spain for example, the price of the i20 version under review is in line with the Corsa and Polo, but it is more expensive than the best-selling SEAT Ibiza.

Nevertheless, in Germany, the i20 has recently won AutoBild magazine’s ‘Goldenes Lenkrad 2020’ – a popular reader’s choice award – in the category for cars with a list price below €25,000.

Click here or on the image below to read Autovista Group’s benchmarking of the Hyundai i20 in France, Germany and Spain. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Launch Report Hyundai i20 November 2020

Remarketing: reaping the rewards of fleet planning

Each month auction houses send the same message: ready to retail vans find eager buyers willing to pay premium prices while those in poor condition struggle to sell. The majority of light commercial vehicles (LCVs) are not refurbished, but ‘sold as seen’ with many requiring significant refurbishment prior to sale.

The majority of buyers at auction are traders. They are experts at moving vehicles quickly to new owners. They supplement their price knowledge using Glass’s values, adjusting these values to take account of vehicle age, mileage and condition. They know exactly how much each damage repair costs. If there is too much damage, they bid low to cover the cost of the repairs. However, as vehicles age, not all dents and nicks are cost effective to repair.

Maximising resale price

Fleet managers can take specific actions to guarantee the best prices for vehicles in the wholesale market. Vehicle presentation coupled to the availability of all documents and keys is vital to achieving this.

The initial life of an LCV is usually determined by operational requirements. Effectively the fleet manager asks whether the vehicle is fit for purpose. This requirement is closely followed by:

  • Low vehicle price
  • Manufacturer support
  • Vehicle warranty
  • Dealer network coverage

In the LCV market, vehicle choice is usually taken by a fleet manager who will not be getting behind the wheel. Driven by budgets, the vehicle selection is often based on initial cost rather than specific thoughts on how the vehicle could be remarketed.

Second life

Taking into account the second life of a vehicle could significantly benefit residual values (RV). Here the fleet manager can carefully consider different trim levels that offer additional safety and comfort features that may maintain the look of the vehicle. Not only can they offer a greater duty of care to drivers, they can also strengthen RVs. At the same time, there is the potential of reducing monthly rental payments if the vehicle is purchased on contract hire.

Higher trim levels, such as the Citroen Berlingo Enterprise, Peugeot Partner Professional, Ford Transit Custom Limited and Volkswagen Transporter Highline are more desirable to second hand buyers. Of course, ensuring they arrive in the second hand market with as little damage as possible will help it sell for a better price.

Planning to boost second hand values by opting for higher trim levels with specific options can pay dividends. The following list includes some features that can add to a vehicle’s desirability in the used market.

  • Comfort features promoting a relaxed driving environment
    • Bluetooth (now offered by most manufacturers as a standard feature)
    • Air conditioning
    • Heated seats
    • Automatic gearbox
    • Additional seats
  • Damage limitation features
    • Rear parking sensors
    • Ply-lining
  • Exterior style
    • Metallic paint

Previously, a satellite navigation system would have been in this list, however, with changes in technology, most drivers prefer to use a smart phone navigation app. That said, the older the vehicle is and the more miles it has covered, the less desirable these added extras are. Specification becomes less of a concern and condition becomes vitally important.

White van versus metallic van

White vans are still the most common in the used market and the easiest to repair. Metallic paint is growing in popularity and often sells at a premium if the vehicle is in good condition. However, metallic paint has a downside; depreciation is faster if the bodywork is damaged. Panels can be expensive to repair, often with the need of a paint oven to match the colour properly over multiple panels. The older the van is, the more difficult it is to match the original faded colour correctly.

Metallic caddy van side view

Selecting higher horsepower vans can also deliver strong used performance, especially when these are selected as a small proportion of a fleet. Vans with larger horse power offer used van buyers something different. However, fleet managers should balance this against likely higher fuel consumption and higher initial purchase price.

Small vans with a third seat or medium sized vans with a second row of seats are extremely popular for customers who want to use vehicles for personal and business travel. These can make premiums over the standard vans if offered combined with features such as air conditioning and metallic paint.

On medium sized vans, tailgates, instead of standard twin rear doors that are paired with an automatic gearbox can gain desirability and stronger RVs for buyers considering converting to camper vans.

Age, condition and service

As vehicles age, vehicle condition plays an increasingly important part in the RV. Damage and excessive wear and tear due to driver misuse can significantly affect RVs. To minimise this, fleet managers should monitor the vehicles whilst in service through telematics systems. These systems appear to ensure driver behaviour is corrected using driver incentive schemes to reward driver performance.

Lastly, a full service history (FSH) is highly important in the used market. The ability to provide a detailed rundown of all maintenance work undertaken throughout a vehicles life and confirm it has received all of its necessary service checks to either address problems or prevent them, gives prospective buyers confidence in the product and sellers, an additional bargaining chip. Vehicles with a FSH can be worth upwards of £500 more than vehicles without.

Rows of used white LCVs

Summary

Planning a fleet is not an easy task. However, just minor considerations in how vehicles could be used in a second life will increase RVs significantly. Additionally, through the life of the vehicle, ensuring drivers maintain and reduce vehicle damage will deliver vehicles at the time of remarketing requiring only small amounts of refurbishment. Supplying your LCVs in a ready to retail condition to the wholesale market will find eager buyers willing to pay premium prices.

UK registrations stall in November as second lockdown takes effect

UK new-car registrations fell by 27.4% year-on-year in November, as a second lockdown came into effect, closing dealerships and hampering sales. New data from the Society of Motor Manufacturers and Traders (SMMT) reveals that 42,840 fewer cars joined British roads, resulting in a £1.3 billion (€1.4 billion) revenue hit for the market.

In total, the UK saw 113,781 new-car registrations last month, taking trade back to levels not seen since the 2008 recession. Private demand fell by 32.2%, while registrations by large fleets dropped by 22.1%. While this most recent decline demonstrates the continued impact of COVID-19, the drop was less severe than the one in the UK’s first lockdown which began in March, where registrations fell by 97.3% in April alone.

Fuel type divergence

Positive trends did continue for alternative-fuel cars, with battery-electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) increasing their number of registrations, up 122.4% and 76.9% respectively. BEVs enjoyed their third-highest ever monthly market share at 9.1%, with PHEVs also building their share up to 6.8%.

Nearly 37% of the market was held by low-emission fuel types in November, resulting in a year-on-year change of 74.1%. This resulted in a combined total of 18,000 new zero-emission capable cars joining the UK’s roads during the month. Meanwhile, petrol continued to hold on to its market majority at 49.1%, with a year-on-year registrations drop of 41.9%, from 96,166 in November 2019 to 55,855 in the same period this year. Diesel sales fell by 56.2% to 15,925 in November 2020 from 36,329 units in the same period last year, holding on to 14% of the market.

SMMT Graphic


Source: SMMT

Protective measures in place

November’s partial triumph is the result of manufacturers being better prepared to deal with the pandemic, having already put in place protective measures during the first wave of COVID-19 and the resulting lockdowns, such as click and collect ordering systems with little to no human contact.

‘Given the huge contribution that COVID-19-secure showrooms make to the economy and a national recovery, reopening dealerships across most of the UK will help protect jobs in retail and manufacturing and should help stimulate spending,’ the SMMT said.

So far, the automotive sector has been stripped of 663,761 units this year, down 30.7%. This means that some 31,000 cars would need to be registered every working day in December if the market was to climb back to the level expected at the beginning of 2020.


UK new-car registrations, January 2018 to December 2020 (forecast from December 2020)

UK new-car registrations, January 2018 to December 2020 graph

Source: SMMT and Autovista Group

‘Compared with the spring lockdown, manufacturers, dealers and consumers were all better prepared to adjust to constrained trading conditions,’ said Mike Hawes, SMMT chief executive. ‘But with £1.3 billion worth of new car revenue lost in November alone, the importance of showroom trading to the UK economy is evident and we must ensure they remain open in any future COVID-19 restrictions. More positively, with a vaccine now approved, the business and consumer confidence on which this sector depends can only improve, giving the industry more optimism for the turn of the year.’

Now with less than a month to go until the UK leaves the EU, talks over a trade deal look to be reaching a pinnacle moment. In the event of no free-trade agreement between the UK and EU tariffs of 10% could be added to imports and exports. Carmakers have already cautioned their inability to absorb this additional cost, meaning they could tag it onto the price of new cars imported into the country, which will only come to hurt the sector further.

New-car registrations deteriorate across Europe in November

Autovista Group senior data journalist Neil King considers the ongoing downward trend in new-car registrations in France, Italy and Spain in November.

Despite government-backed incentives in France, Italy and Spain, new-car registrations suffered significantly again in November, according to data released by the respective automotive trade associations. As countries battle the second wave of coronavirus (COVID-19) cases, restrictions and/or economic repercussions are impacting registration volumes, albeit inflicting far less damage than in March to May.

Following the lifting of lockdowns earlier in the year, the countries’ automotive markets had shown signs of recovery, but, all three suffered a continuation of the downward trend that commenced in September. The 18.7% contraction in Spain was a subtle improvement on the 21.0% year-on-year decline in October, but this was only because of the extra working day in November 2020 compared to November 2019.

New-car registrations, France, Italy and Spain, year-on-year percentage change, January to November 2020

Autovista Group senior data journalist

New-car registrations graph, France, Italy and Spain, y-o-y percentage change, January to November 2020

Source: CCFA, ANFIA, ANFAC

New-car registrations were 27.0% lower in France in November 2020 than in the same month of 2019, even with one extra working day, according to the latest data released by the CCFA, the French automotive industry association. This is the largest year-on-year decline in a month since May, but compared to the dramatic falls in March and April, ‘the re-confinement had decidedly different consequences for the car market,’ commented the CCFA in a flash statement.

‘All the dealers were closed in France in November. They were only allowed to deliver cars that had already been ordered before the second lockdown. They have reopened since 28 November,’ clarified Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux. As dealers could still honour deliveries of orders, this explains why the downturn in France was far less significant in November than during the first lockdown.

In the first 11 months of 2020, new-car registrations in France were 26.9% lower than in the same period in 2019. With dealers open again, December will invariably be a healthier month for the automotive sector, but new-car registrations will still be about 25% lower in 2020 than in 2019.

Less lockdown, more crisis in Spain

In Spain, 75,708 new cars were registered during November, 18.7% fewer than in November 2019, according to ANFAC, the Spanish vehicle manufacturers’ association. ‘The red numbers remain in all segments and vehicle-sales channels in November 2020, and therefore in the cumulative figures. The second wave of the pandemic, and the associated serious economic and social crisis, is deepening the decline in sales in all markets,’ ANFAC commented.

The MOVES II and RENOVE incentive schemes were introduced in July and the new-car market saw a 1.1% increase that month. Since then, however, the year-on-year results have deteriorated, with the November fall only improving slightly on October because of the extra working day in the month.

Ana Azofra, valuations and insights manager at Autovista Group in Spain, explained that ‘the lockdown had many different scenarios, depending on the region and city, but was less restrictive than during the first wave and dealers – at least most of them – remain open. However, the RENOVE incentives for internal combustion engines (ICE) are exhausted and, moreover, the crisis is already affecting private consumption. The unemployment rate already increased in Spain and now stands at 16.5%, maintaining the negative trend.’

Measures to deal with the second wave of COVID-19 infections and the economic repercussions of the crisis are clearly weakening consumer demand. Furthermore, the calculation of the registration tax based on WLTP emissions figures, from January 2021, will further complicate the recovery.

‘Half of the vehicles sold in 2021 will see their taxation increased at the time of purchase due to the entry into operation of the European WLTP regulation. This average price increase of 5% will mean, in such a bad environment for vehicle sales, a worsening of the sector’s situation, making it even more difficult to get out of the crisis. We need the registration tax increase to be corrected before January 1 so that the [automotive] industry and the sector can be the driver of the Spanish economy that they have always been and will be,’ the three associations, ANFAC, Faconauto and Ganvam, declared in the ANFAC release.

Second consecutive monthly decline in Italy

In Italy, the year-on-year downturn in November reported by the industry association ANFIA was 8.3%, although the result would have been worse (down about 12%) had there not been the extra working day. This is the second consecutive month that the country is back in negative territory following the 9.5% growth in new-car registrations in September due to the new government incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). While the market still contracted in that month, demand improved but delivery times delayed many registrations until September.

As in Spain, there was not ‘a full lockdown in Italy like the one we experienced in March and car dealers were – and still are – open. However, depending on the zones, there is a ‘light’ lockdown, with different restrictions that put pressure on sales as a result. Furthermore, the incentive scheme for vehicles with the highest range of CO2 emissions has been exhausted,’ commented Marco Pasquetti, forecast and data specialist of Autovista Group in Italy.

‘Without a new intervention to support the car market, the new drop in sales leaves companies with the need to reactivate layoffs, which, in any case, will not be sufficient to stem the loss of turnover today, compared to 2019, at an average value of -25%. The data on the use of the redundancy fund in the period January to October 2020, compared to the same period in 2019, show an increase of 6,000%. These are striking data that induce reflection on the cost of failure to support the car,’ highlighted Adolfo De Stefani Cosentino, president of FEDERAUTO, in the ANFIA release.

The key to the recovery of new-car markets revolves around countries agreeing on budgets for 2021, and improving economic certainty and consumer confidence to boost spending. However, with COVID-19 not yet under control, and further lockdowns possible, the industry faces a difficult end to 2020 and a challenging 2021.

The Demise of 4×4 Pickup Production in Europe

The Pickup

Created initially as a purely utilitarian vehicle, the pickup has evolved many times over the past 100 years. In the future, an element of electricity could be added if Tesla’s concept goes into production. With the pickup of the future not so distant anymore, pickup enthusiasts have much to be excited about. However, the pickup, long an American and Australian icon (in the form of a “ute”) and a dependable load-carrying force in Europe, will continue for the foreseeable future albeit with production moved away from European factories.

What is a pickup?

A pickup truck or pickup is a light truck with an enclosed cab and an open cargo area with low sides and tailgate. In Australia and New Zealand, both pickups and coupé utilities are called “utes”, an abbreviation for a utility vehicle. With the development of the pickup, there has been the inclusion of several different cab types allowing additional occupants in varying degrees of comfort. It is the double cab that effectively combines SUV space in the cab with a large open cargo area. It is this body style that has become very popular, especially in the UK where double-cab pickups with payloads over a tonne are assessed as light commercial vehicles (LCV) for benefit in kind taxation. This tax advantage continues to make these vehicles attractive for company car drivers creating high levels demand for special edition pickups such as the Volkswagen Amarok Dark Label and the Arctic Truck series.

The demise of 4×4 Pickup Production in Europe

The announcement that Nissan is to close their Barcelona production facility by the end of 2020, arrives with plans to relocate production of the Navara pickup to South Africa, while, according to reports, a replacement for the e-NV200 van, also built at the Barcelona factory, would be built at Renault’s plant in Maubeuge, France. Glass’s Chief Commercial Vehicle Editor, Andy Picton, takes a closer look at the history of the 4×4 pickup and how production has slowly moved away from Europe.

2019 Nissan Navara Double Cab

History

Pickups have been available since the early 1900s. Most were constructed by third parties by adding pickup style bodies to manufacturer-supplied chassis. However, it was the Second World War that became the catalyst for the development of the pickup. The roots of mass-produced four-wheel-drive pickup vehicles can be traced to this period with the Willys CJ-2A Jeep, followed by the Ford F-Series and the Land Rover Series I in 1948.

Jeep Willys CJ side view

However, it was with the launch of the Dodge Power Wagon at the end of the Second World War that the pickup became recognisable to today’s customers with fixed body-coloured side panels. This was the first model where the body style had an integrated appearance.

The appeal of the pickup grew in the 1950s with Chevrolet, GMC, International, Studebaker, Toyota and Hino all launching models in the USA. Foreign competition in the American pickup market effectively stopped in 1963 with the implementation of the ‘Chicken Tax’ in 1963 which directly penalised any country importing light trucks into the USA.

Ten years later, the federal government in the USA introduced the Corporate Average Fuel Economy (CAFE). This policy was designed specifically to improve the fuel economy of cars. Unhindered by the new stringent CAFE controls, pickups started to take the place of muscle cars as the performance vehicle of the time. In 1978, the introduction of the ‘Gas Guzzler Tax’ in the USA again targeted inefficient cars, whilst again exempting pickups.

A further advantage in their production at this time was that pickups were not required to meet the same safety standards as cars until 1999. These rules distorted the American market in favour of the pickup.

During the 1980s compact pickups from Mazda, Mitsubishi and Isuzu went on sale in the USA prompting Ford to launch the Ranger and Chevrolet to launch the S-10 as compact rivals. It was also during this time that pickup sales took off in other international markets such as Australia, South Africa and Asia.

Mitsubishi L200 pickup truck side view yellow

In Europe, the introduction of the pickup was a much slower burn. Early examples were two-wheel-drive car conversions such as the Citroen 2CV pickup, Morris Minor pickup and Fiat Musone pickup. These were followed by the Yugoslavian built Volkswagen Caddy, the Peugeot 504 pickup produced in France and the Ford P100 assembled in Portugal. It was during the Eighties when Asian manufacturers including Mitsubishi, Isuzu, Nissan and Toyota, along with Ford began to launch dedicated 4×4 pickups in Europe.

Citroen 2CV pickup truck side view

For a short period, the Isuzu KB (Isuzu Faster/Chevrolet LUV/Bedford KB in other world markets) and the Mitsubishi L200 were assembled in Europe.

Bedford KB pickup truck blue

Additionally, Volkswagen’s second tentative step in producing pickups took the form of the Taro. This was a joint venture with Toyota where Volkswagen built rebadged versions of the Toyota Hilux in Hannover from 1989. Only the 4×2 single cab variant was assembled there, with the Joint Venture ending in 1997 due to low sales volumes.

Volkswagen taro pickup truck orange

From 1997, Nissan was the only mainstream manufacturer assembling 4×4 pickups in Europe. Their Barcelona plant in Spain assembled the D22 Series and continues to this day with the current Navara range. From 2016, the plant also builds re-engineered versions of the Alaskan for Alliance partner Renault and from 2017 and the Mercedes-Benz X-Class.

In 2012 European production of the Volkswagen Amarok was transferred from the Pacheco plant in Argentina to Hannover in Germany, sharing the facility with the Transporter van.

Ceasing European production

Volkswagen have announced that production of the current Amarok will cease completely at their Hannover plant by May 2020. Sifting through the news stories, many articles suggest that Ford and Volkswagen will co-develop a replacement for the Amarok pick-up truck. The details are currently sketchy, however, it appears that Ford’s mid-size Ranger pickup will form the basis of any future platform cooperation on pickups, helping Volkswagen reduce the costs associated with designing a replacement for the Amarok. Analysts suggest the partnership could create a production model with an on sale in 2022.

Volkswagen will stop selling the Amarok in the UK on the 31st August 2020, just before new emissions regulations come into force in September, obliging LCV manufacturers to lower the average CO2 emissions of their vehicle ranges to below 147g/km. The Amarok’s powerful V6 engine pushes its CO2 to 213g/km in its cleanest guise, lifting Volkswagen’s average significantly.

Production of the next-generation Amarok is thought to be moving to Ford’s Silverton facility near Pretoria, South Africa, with the spare factory capacity at Hannover potentially given over to new electric ranges due for future launches.

Early in 2020, Mercedes-Benz announced the demise of the X-Class pickup connected to the unavailability of Euro 6d-Temp engines. Production of the X-Class pickup at the Nissan factory in Barcelona ceased at the end of May, with the last units for the UK registered by 31st August 2020.

This brings the story up to date, with the announcement in May that Nissan will be closing the Barcelona factory. The production of the Navara will move to Nissan’s newly renovated facilities in Roslyn, near Pretoria in South Africa by the end of 2020. From a business perspective, this decision was made easier by the reduced volume produced in Barcelona of only 53,000 vehicles in 2019, around 25% of the factory capacity of 200,000.

Pickup Production

ModelCurrent ProductionFuture Production
Ford RangerSilverton, South AfricaSilverton, South Africa
Great WallBoading, ChinaBoading, China
Isuzu D-MaxPhrapradaeng, ThailandPhrapradaeng, Thailand
Mercesdes-Benz X-ClassBarcelona, Spain–
Mitsubishi L200Laem Chabang, ThailandLaem Chabang, Thailand
Nissan NavaraBarcelona, SpainRosslyn, South Africa
Renault AlaskanBarcelona, SpainRosslyn, South Africa
SsangYong MussoPveontaek, South KoreaPveontaek, South Korea
Toyota HiluxProspecton, South AfricaProspecton, South Africa
Volkswagen AmarokHannover, GermanySilverton, South Africa

The future of pickups

In an age of alliances and technology sharing, the pickup is leading the industry in how this can be achieved. However, with that sharing and the search for cost-saving has come a time where pickups are no longer built in Europe. With the closure of Nissan’s Barcelona plant, and Volkswagen’s relocation of Amarok production outside Europe, it means that no pickups will be built in Europe by the end of 2020. Although not currently a trend across all LCVs, the Glass’s commercial editorial team will continue to monitor the production of other segment contenders and understand where the next production trends will surface.

VW ID.3 offers TCO and equipment advantage over Golf VIII in Germany

Christoph Ruhland, Autovista Group’s European sales director, has produced analysis that reveals that the Volkswagen ID.3 has a lower total cost of ownership (TCO) and better standard equipment than the Golf VIII.

Volkswagen (VW) commenced order intake for the new ID.3 battery-electric vehicle (BEV) in Germany on 24 November. At face value, VW’s first dedicated BEV model has a higher TCO than the latest generation of the Golf, largely due to the higher acquisition costs of the ID.3 as its list price (about €35,000) is significantly higher than the 1.5-litre petrol Golf VIII.

Depreciation is the largest single factor in calculating acquisition costs and Autovista Group has benchmarked the prices and forecast residual values of both the ID.3 and Golf VIII against key competitors. Acquisition costs also include taxes and finance.

TCO and acquisition costs, VW Golf VIII versus ID.3

TCO and acquisitions

Source: Autovista Group, Car Cost Expert

The higher acquisition costs of the ID.3 are partly compensated by the BEV’s reduced utilisation costs, due to lower spending on fuel, service, wear and insurance. As with all BEVs, service costs are lower than for cars with internal combustion engines due to the lack of oil, and components such as oil filters and spark plugs. In fact, the ID.3 only requires replacement of the brake fluid and pollen filter at regular service intervals.

Service costs, VW Golf VIII versus ID.3

Service costs VW Golf VIII versus ID.3 table

Source: Autovista Group, Car Cost Expert

However, crucially, BEVs in Germany are subsidised with generous purchase incentives. The grant for BEVs costing less than €40,000 previously amounted to €6,000, split equally between the government and the carmaker. Since 1 July, the government has doubled its incentive (from €3,000 to €6,000) and in combination with the additional €3,000 contribution from VW, the acquisition costs of the ID.3 are about €1,400 lower than for the petrol Golf. In combination with the lower utilisation costs, the incentive-adjusted TCO of the ID.3 is about €4,300 less than the petrol Golf.

This aligns with Autovista Group analysis of C-segment models, published in June, which uncovered that BEVs are only TCO-competitive in European markets because of government incentives. In Germany, the additional €3,000 government subsidy since 1 July gives the ID.3 a significant TCO advantage over the Golf VIII.

Discounting and equipment analysis

However, customers may be able to negotiate a healthy discount on the Golf VIII, which OEMs are unlikely to offer on BEVs in addition to their €3,000 incentive contribution. For example, a 20% discount on the petrol Golf would give it a TCO advantage of approximately €2,150 over the ID.3. Nevertheless, a 5% discount on the ID.3, in addition to the €9,000 BEV incentive, would be sufficient to make its TCO competitive with a 20%-discounted Golf.

Furthermore, it must be noted that the ID.3 has 204 horsepower and is therefore more powerful than the 150-horsepower 1.5-litre petrol Golf. The ID.3 also has better standard equipment, which Autovista Group has calculated to be worth about €1,800.

Equipment costs, VW Golf VIII versus ID.3

Equipment costs, VW Golf VIII versus ID.3 table

Source: Autovista Group, Car Cost Expert

When this is factored into the TCO calculation, the ID.3, even without discounting, narrowly beats a Golf with a 20% discount. If the ID.3 gains a 5% discount, the TCO advantage would amount to €2.400.

This would leave enough change for ID.3 buyers to invest in a home charger for the ID.3, which costs about €2,000 in Germany, including installation. Chargers are also entitled to a government incentive in Germany, about €900, and so EV-friendly families could even buy and install two units with the cost saving. Maybe one for themselves to overcome charging anxiety and one as an extra source of income?

Click here to view Autovista Group’s TCO dashboard for C-segment models, published before incentives were increased in Germany in July, and here for the TCO dashboard for B-segment models, published in September.

Autovista Group’s latest TCO dashboard considers D-SUV BEVs, revealing that they struggle to compete with petrol and plug-in hybrid D-SUV models without being eligible for government incentives.

Targeting non-exhaust emissions

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

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

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

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

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

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

Overlook of London City gloomy exhaust emissions

Mitigation strategies for NEE

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

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

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

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

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

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

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

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

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

Brake dust front left view

2020 an amazing year for the used LCV market

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Van’s Headlights: The Renault Kangoo ZE

The Van’s Headlights

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

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

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

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

Renault Kangoo ZE van badge

The Renault Kangoo ZE

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

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

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

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

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

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

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

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

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

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

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


Something for everyone

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

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

The Renault Kangoo range

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


Renault Kangoo Mazi ZE 33 Business van (2019 – )

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

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

Glass’s recommendation

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

Podcast: Used cars and ICE bans as manufacturers get smart

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

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

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

Used Car Market Update November 2020

Used Car Auction Wholesale Market

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

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

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

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

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

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

Used Car Retail Market

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

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

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

Used car market average days to sell graph November 2020

Next Month

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

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

The Van’s Headlights: Ford Transit Connect

The Van’s Headlights

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

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

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

2018 Ford transit connect limited L2 front side view

The Ford Transit Connect

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

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

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

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

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

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

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

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

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

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

Something for everyone

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

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

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

The Ford Transit Connect range

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

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

2018 Ford transit connect limited interior

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

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

Glass’s recommendation

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

Registration Plate: 2018/18

Mileage: 31,000 miles

Glass’s Trade £12,600 Excl VAT

Glass’s Retail £13,750 Excl VAT

LCV Marketplace Update November 2020

New Light Commercial Vehicle (LCV) Market

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

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

New LCV registrations graph November 2020

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

LCV top 5 registrations table November 2020

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

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

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

October Used Light Commercial Vehicle (LCV) Overview

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

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

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

October in detail

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

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

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

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

New Car Market Update October 2020

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

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

Total new car registrations monthly graph November 2020

Data courtesy of SMMT

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

New car market fuel type ytd % change graph November 2020

Data courtesy of SMMT

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

Car Market Overview November 2020

To adhere to the latest government imposed COVID-19 lockdown, on November 5 car dealers in England temporarily closed their physical sales operations for the second time in a year. Lockdown-2 follows similarly enhanced social restrictions seen in other parts of the UK. Despite this economic setback, many dealers continue to offer cars for sale through ‘click and collect’. However, even with these strategies in place, Glass’s still expects a significant impact on UK dealer’s profits.

To support businesses throughout this period the Government has extended the Furlough scheme, which will be welcome news. However, this extension does not only cover the four-week lockdown, it will last until the end of March 2021. This has raised anxiety amongst business leaders that extended restrictions may affect businesses via full lockdowns or changes to the local tiered alert system.

The tier system was in place in October, affecting different regions in England in a variety of ways, although not affecting car dealers and other ‘non-essential’ retail outlets. In other parts of the UK, restrictions required dealers to close. This impacted new car sales during this period. According to the Society of Motor Manufacturers and Traders (SMMT), the new car market fell by 1.6% in October, to just under 141,000 registrations, marking a nine-year low. The year to date registration total now sits almost 621,000 below last year, a drop of 31%.

The wholesale auction market continued with strength in the early days of October, but conversion rates began falling as the month went on. It seems that many dealers felt they had the correct level of stock and began ‘cherry-picking’ as a result. As is common when dealers become more selective, vehicle condition becomes more important, with cars with higher auction condition grades falling out of favour, either receiving no bids or disproportionately low offers. Glass’s understands that sold volume increased slightly in October compared to last year but first-time conversion rates fell by five percentage points, to 80%.

Although there is a high level of uncertainty in the current new and used car markets, dealers should take some comfort from how trading bounced back following the end of Lockdown-1. However, with the latest lockdown due to end in December, which is typically a slower retail month due to the pressures of Christmas, Glass’s does not expect retail activity to be as strong. That said, we expect wholesale trading to remain reasonably positive, as dealers build stock for the important post-Christmas and early new year period.

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Brexit survey: have your say

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Click here to access our Brexit survey, and tell us how the negotiation uncertainty and the UK leaving the EU is impacting your business and industry.