Fuel Type: Plug-in Hybrid (PHEV)

Glass’s One Minute Market Update

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

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

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

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

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

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

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

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

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

Top five LCV registrations

Top five LCV reg. March 2021

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

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

March used Light Commercial Vehicle (LCV) overview

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

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

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

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

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

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

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

March in detail

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

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

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

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

Originally written for Commercial Fleet

Spain introduces MOVES III incentive scheme

Spain introduced the new MOVES III incentive scheme for electrically-chargeable vehicles (EVs) on 10 April, which includes hydrogen fuel-cell vehicles (FCHVs) for the first time.

All FCHVs, as well as battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs) that cost less than €45,000 (excluding VAT), are eligible, with the price ceiling rising to €53,000 for vehicles with eight or nine seats. Used EVs that are less than nine months old are also eligible.

It is worth noting that across Spain and the major European markets, the residual-value (RV) disadvantage of BEVs compared to petrol cars has widened since March 2020. The greatest divergence has occurred in Germany, where the gap has widened by just under four percentage points (pp) and stood at 10 pp in January 2021. The divergence accelerated notably following the introduction of enhanced incentives on 1 July 2020.

Cautionary tale

This is a cautionary tale for Spain as it rolls out this new scheme. All governments should look into providing incentives to encourage used-BEV ownership, but these do not need to be straightforward purchase incentives. Lower energy costs for charging BEVs and visible expansion of the charging network would also be powerful signals.

‘The biggest potential risk for pressure on RVs stems from the purchase incentives for EVs. A positive and moderating effect comes from the longer-term ownership tax reduction and a lack of company-car tax benefit,’ commented Ana Azofra, head of valuations and insights at Autovista Group in Spain.

As detailed in the table below, private buyers of EVs with an electric range of at least 90 km are entitled to a subsidy of €4,500 in Spain, which is reduced to €2,500 for EVs with a range of 30 to 90 km.

MOVES1

Source: IDAE

For small and medium-sized enterprises (SMEs), the incentives amount to €2,900 for EVs with an electric range of at least 90 km, reducing to €1,700 with a range of 30 to 90 km. For large companies, the incentives are €2,200 for EVs with an electric range of at least 90 km and €1,600 with a range of 30 to 90 km.

MOVES2

Source: IDAE

The scheme runs until the end of 2023, with an initial budget of €400 million, rising to €800 million dependent on its success. This is significantly higher than the original funding allocation of €100 million for the MOVES II scheme that came into effect in June 2020, which the Spanish government extended by €20 million early in March.

‘We have chosen to start with those actions that families, SMEs, the self-employed and, ultimately, the entire fabric of the country can benefit from,’ explained Teresa Ribera, vice president of Spain and minister for the ecological transition and the demographic challenge, in the presentation of the MOVES III plan.

‘It is crucial to keep pace with the actions promoting the value chain of the automotive sector in our country, with the creation of employment and new business models,’ Ribera added.

Unlikely improvement

The new incentives are slightly higher for private buyers but lower for companies. However, the benefits are much greater if a used vehicle over seven years of age is traded in for scrappage. For private buyers, the incentive increases up to €7,000, and up to €4,000 for SMEs and €3,000 for large companies.

‘MOVES III constitutes the most ambitious line of support for electric mobility that our country has proposed and will allow and contribute to the economic reactivation in the short term, accompanying the necessary transformation of the industrial model of our country with the economic and environmental objectives,’ Ribera said.

Nevertheless, the new scheme is unlikely to significantly improve the fortunes of Spain’s new-car market. Registrations grew 128% in March compared with a year ago, but the comparison is distorted by the pandemic. Spanish dealerships closed from 14 March 2020. A more realistic comparison with March 2019 shows the new-car market contracting by 30%. Sales in the first quarter dropped 14.9% against last year’s figures, and were 41.3% down on figures from two years ago.

EV uptake should increase, especially among private buyers, but without an improvement in consumer confidence, and a return of tourism, the Spanish market will continue to struggle overall. Autovista Group forecasts that demand will recover from the 32% loss in 2020, albeit by only 6% to about 900,000 units in 2021.

German registrations start slow recovery in March

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

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

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

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Brand increases

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

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

Electric closes the gap

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

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

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

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

Launch Report: Volkswagen Caddy – improved engines and specifications

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

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

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

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

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

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

Caddy

More effort needed to entice private buyers to EVs

More needs to be done to support the private uptake of electrically-chargeable vehicles (EVs) in the UK, according to the Society of Motor Manufacturers and Traders (SMMT). New figures show businesses are twice as likely to make the switch from petrol and diesel.

Analysis of new-car registrations in 2020 shows that just 4.6% of privately bought cars were battery-electric vehicles (BEVs), compared to 8.7% for businesses and large fleets. This equates to 34,324 private registrations and 73,881 corporate ones.

In response to this, the SMMT has unveiled a new blueprint to deliver a greater retail uptake. With the UK government planning to ban the sale of petrol and diesel vehicles by 2030, the body believes now is the time to change people’s attitudes towards EVs.

‘While last year’s bumper uptake of electric vehicles is to be welcomed, it is clear this has been an electric revolution primarily for fleets, not families,’ commented SMMT chief executive Mike Hawes. ‘Manufacturers are committed to the consumer, reducing costs and providing as wide a choice as possible of zero-emission capable vehicles with many more to come.

‘To deliver an electric revolution that is affordable, achievable and accessible to all by 2030, however, government and other stakeholders must put ordinary drivers at the heart of policy and planning.’

Increasing availability

According to the SMMT, as of March 2021, manufacturers have brought more than 150 BEV, plug-in hybrid (PHEV), hybrid and hydrogen fuel-cell electric vehicles (FCEVs) models to the UK market. BEVs and PHEVs alone account for 25% of all available car models.

However, current higher costs of components’  raw materials mean these vehicles are inherently more expensive to manufacture. This implies an EV will retail for more than its fossil fuel equivalents.

Manufacturers are working hard to bring the cost of production down. Yet, they are constrained by lower demand and battery production costs, which have yet to reach the economies of scale required. Batteries have the biggest overall impact, representing 30-45% of the total production cost the SMMT states. BEVs are not expected to reach purchase cost parity with their internal combustion engine (ICE) counterparts across all car segments in the next few years.

The area where EVs benefit their drivers is in terms of running costs. This is of particular interest to businesses. In addition, company car drivers currently receive stronger and longer-lasting motivation through reduced purchase-taxes and fiscal incentives compared to consumers.

Grants changing

Last week, the UK government announced it will reduce the plug-in car grant and lower the price threshold for eligibility. This effectively adds £500 (€583) to the purchase price of all qualifying EVs under £35,000, and £3,000 to the price of those above £35,000.

By comparison, private buyers in Germany receive a €9,000 grant towards a new BEV, while Dutch drivers do not pay VAT on BEV purchases, equivalent to a purchase cost saving of around a sixth.

The SMMT estimates that maintaining the grant and similarly exempting consumer EV purchases from VAT would increase uptake by almost two-thirds by 2026 compared to current predictions.

Charging locations

The blueprint also calls for more to be done to expand the UK’s EV infrastructure. Private-buyer acceptance remains low because of affordability concerns, charge point availability and infrastructure reliability, according to the SMMT. Around one in three households have no dedicated off-street parking, leaving them disproportionately dependent on public-charging points.

The SMMT’s projections suggest that most drivers will choose to charge their vehicle at home if they can. Therefore, they estimate there would need to be around 2.7 million public-charge points in service by 2030 to provide adequate coverage and tackle range anxiety. The SMMT believes there are around 40,000 charging points in the country, most of which are in London.

This means more than 700 new charge points would have to be installed every day until the end of the decade. By comparison, the current installation rate is approximately 42 a day, according to information provided to the SMMT from charge-point mapping service ZapMap. Funding this expansion is estimated to cost around £17.6 billion.

‘We need incentives that tempt consumers, infrastructure that is robust and charging points that provide reassurance, so that zero-emission mobility will be possible for everyone, regardless of income or location,’ stated Hawes. ‘When every market is vying for these new technologies, a clear and collaborative strategy engaging all would ensure the UK remains an attractive place both to manufacture and market electric vehicles, helping us achieve our net-zero ambition.’

Used Car Market Update- February 2021

Used Car Auction Wholesale Market

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

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

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

Used car market first time conversion rate graph February 2021
Used car market percentage of original cost new graph February 2021

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

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

Used Car Retail Market

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

Used car retail market observations graph February 2021
Used car market average sale price February 2021

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

Used car market average days to sell February 2021

Outlook

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

UK to cut EV grants and reduce price eligibility

The UK Government is lowering the plug-in vehicle grant offered to consumers buying an electrically-chargeable vehicle (EV). It is also imposing a list-price limit, reducing the number of models eligible for the new incentive amount.

From 18 March, only vehicles priced below £35,000 (€40,906) will qualify In addition, the total amount consumers can claim towards the cost is reduced by £500, to £2,500. The government claims that implementing this lower grant and the price cap can spread the funds available across a larger number of EV sales over a longer period.

The move has been met with disappointment by the country’s automotive industry. With dealerships closed until at least the middle of April due to COVID-19 lockdowns, vehicle sales in the UK have suffered. The government is also pushing forward with plans to ban the sale of internal-combustion engine (ICE) models by 2030. Cutting grants now could hamper both a sales recovery and the adoption of an emerging market.

‘With a stretching 2030 target in place to phase out sales of new petrol and diesel cars and vans, we must avoid sending mixed messages to consumers and businesses. Switching to an electric vehicle still has many barriers, including high upfront costs and availability of reliable charging points,’ commented Matthew Fell, chief UK policy director at the Confederation of British Industry (CBI).

‘The decision to slash the plug-in car grant and the van and truck grant is the wrong move at the wrong time,’ added Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT). ‘New battery-electric technology is more expensive than conventional engines, and incentives are essential in making these vehicles affordable to the customer.’

Increasing choice of vehicles

The government states the number of EV models priced under £35,000 has increased by almost 50% since 2019 and that half the models currently on the market will still be eligible for the reduced grant.

According to the government’s website, a total of 36 cars qualify for the new grant. Most of these are in the small and compact-car segments. In its statement, the Department for Transport (DfT) singled out the Hyundai Kona 39kWh and MG ZS EV as examples of ‘family cars’ that are still available with the new £2,500 incentive. However, both these models, and other small SUVs on the list, have a range of around 160 miles. They are not as suitable for long-distance driving.

Those who need to travel long distances are, therefore, being priced out of receiving a grant. The government believes that these models ‘are typically bought by drivers who can afford to switch without a subsidy from taxpayers.’

Reducing emissions

The plug-in vehicle grant scheme was renewed last year, with £582 million of funding available until 2022-2023. It also cut the amount offered to consumers from £5,000 to £3,000 while also introducing a price ceiling of £50,000.

‘Measures to encourage people to switch to electric vehicles are working, with nearly 11% of new cars sold in 2020 having a plug,’ the government states. ‘This was up from just over 3% in 2019 – and battery-electric car sales almost tripled over that same period.’

‘We want as many people as possible to be able to make the switch to electric vehicles as we look to reduce our carbon emissions, strive towards our net-zero ambitions and level up right across the UK,’ commented transport minister Rachel Maclean.

‘The increasing choice of new vehicles, growing demand from customers and rapidly rising number of charge points mean that, while the level of funding remains as high as ever, given soaring demand, we are refocusing our vehicle grants on the more affordable zero-emission vehicles, where most consumers will be looking and where taxpayers’ money will make more of a difference.’

The wrong move

The announcement comes at a time when a vehicle-sales recovery is required following three-and-a-half months of lockdown. The industry is also attempting to transition away from ICE technology. The news of the grants cut has, therefore, been met with disappointment.

Ford’s upcoming Mustang Mach-E, is its first foray into the mass-produced battery-electric vehicle (BEV) market. The model will be priced around £40,000 in the UK, making it ineligible for the government grant. As the country’s market leader, Ford will have hoped for a strong sales performance of its new model. However, with no incentive to purchase, sales may be impacted.

‘Today’s news from the UK Government that plug-in grants for passenger and commercial vehicle customers are being reduced is disappointing and is not conducive to supporting the zero-emissions future we all desire,’ commented Graham Hoare, Ford of Britain chairman.

‘Robust incentives – both purchase and usage incentives – that are consistent over time are essential if we are to encourage consumers to adopt new technologies, not just for all electrics but other technologies too like plug-in hybrids (PHEVs) that pave the way to a zero-emissions future.’

The move could also impact shipments of EVs to the UK when the industry is finding its feet again following Brexit upheaval. Manufacturers could concentrate their production for countries where sales are likely to increase, especially with higher government support.

‘Cutting the grant and eligibility moves the UK even further behind other markets, markets which are increasing their support, making it yet more difficult for the UK to get sufficient supply,’ commented Hawes. ‘This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the government’s ambition to be a world leader in the transition to zero-emission mobility.’ 

VW Group plans for cheaper EV-battery mass production

Volkswagen (VW) Group has presented its technology roadmap for batteries and charging up to 2030. The carmaker has also indicated that by ramping up its plans, jobs will need to be sacrificed.

The OEM will establish six gigafactories in Europe with a total production capacity of 240GWh by 2030. It will also expand its public fast-charging network, having announced cooperation with BP in the UK, Iberdrola in Spain and Enel in Italy.

Its new roadmap aims to significantly reduce both the battery’s complexity and cost, making electrically-chargeable vehicles (EVs) attractive and viable for consumers. At the same time, it will shorten its supply chain and control as much of the EV production of as possible.

‘E-mobility has become core business for us,’ commented Herbert Diess, chairman of the VW Group board. ‘We are now systematically integrating additional stages in the value chain. We secure a long-term pole position in the race for the best battery and best customer experience in the age of zero-emission mobility.’

Manufacturing control

As the market leader in Europe, VW Group knows it is responsible for delivering affordable electromobility as the industry transitions away from internal-combustion engine (ICE) technology. While some carmakers have announced plans to go EV-only, the carmaker is creating a sub-brand for its Volkswagen marque. Stablemate Bentley is choosing to focus on battery-electric vehicles (BEVs), and Porsche is investigating eFuels. All VW Group brands will feature electrification in some way. This means the carmaker will need an excessive amount of batteries, both for BEV and plug-in hybrid (PHEV) models.

‘Together with partners, we want to have a total of six cell factories up and running in Europe by 2030, thus guaranteeing security of supply’, explained Thomas Schmall, VW Group board member for components.

To achieve its aims, VW Group will increase its order of batteries from its supplier Northvolt by €14 billion. It will focus production of premium cells at its factory in Skellefteå, Sweden, which will see manufacturing begin in 2023 and increase gradually to an annual capacity of 40GWh. The carmaker will also purchase outright the joint venture it has with Northvolt for a gigafactory in Salzgitter.

‘Volkswagen is a key investor, customer and partner on the journey ahead, and we will continue to work hard with the goal to provide them with the greenest battery on the planet as they rapidly expand their fleet of electric vehicles,’ said Peter Carlsson, co-founder and CEO of Northvolt.

The company is considering potential sites and partners for the other factories.

Cheaper batteries

As well as increasing production, VW Group wants to lower the cost of batteries, making vehicles more affordable as a result. ‘We aim to reduce the cost and complexity of the battery and at the same time, increase its range and performance,’ added Schmall. ‘This will finally make e-mobility affordable and the dominant drive technology.’

Therefore, by 2023, the company will introduce a ‘unified cell’, which will feature in 80% of all EVs in the group by 2030. This plan will allow the carmaker to introduce different chemistries into a standard battery-cell design, which will reduce costs while ensuring that each model retains a unique power or range attribute.

Further savings will be delivered by optimising the cell type, deploying innovative production methods, and consistent recycling.

VW Group will gradually reduce battery costs in the entry-level segment by up to 50% and in the volume segment by up to 30%. ‘We will use our economies of scale to the benefit of our customers when it comes to the battery too. On average, we will drive down the cost of battery systems to significantly below €100 per kilowatt-hour. This will finally make e-mobility affordable and the dominant drive technology,’ said Schmall.

Expanding charging infrastructure

In order to facilitate mass-adoption of its EVs, the OEM is also looking to expand its fast-charging network and has partnered with local providers in key markets to achieve this.

Along with its partners, the company intends to operate about 18,000 public fast-charging points in Europe by 2025. This represents a five-fold expansion of the fast-charging network compared to today.

The carmaker wants to establish about 8,000 fast-charging points throughout Europe together with BP. With a charging capacity of 150kW, the fast chargers will be installed at 4,000 BP and Aral service stations, with the majority of these in Germany and Great Britain. In cooperation with Iberdrola, Volkswagen will cover the main traffic routes in Spain. In Italy, it will collaborate with Enel to establish a fast-charging network both along motorways and in urban areas. The carmaker will also continue its activities as part of the Ionity joint venture.

Job losses

While the roadmap promises cheaper EVs with increased production, the carmaker is also poised to cut jobs to reduce costs.

In agreement with its works council, the group will freeze its workforce size at the January 2021 level and open up an extensive retirement package. It will offer partial retirement to employees born in 1964, as part of the digital transformation roadmap. It will reopen partial retirement for those born in 1961 and 1962, and launch an early-retirement programme for those born between 1956 to 1960.

‘Disciplined cost management will continue to be necessary to finance the required investments in the future, to remain competitive and, above all, to make it possible to safeguard jobs in the long run,’ commented Gunnar Kilian, chief human resources officer of Volkswagen AG. ‘The measures set out in the guidelines provide the right solution for this. We are strengthening the internal transformation of our workforce and creating jobs in forward-looking areas – through training and targeted external recruitment. For this purpose, we are also increasing our training budget by €40 million to a total of €200 million.’

Based on experience, the company expects up to 900 employees to volunteer for the short-term early-retirement models, with a low four-digit figure for partial retirement.

New Light Commercial Vehicle (LCV) Market February 2021

The new light commercial vehicle market grew by 22.0% in February. This positive high-level figure includes delayed pipeline orders and is set against the typically quiet month preceding the new March plate. Year-to-date, the light commercial vehicle market is 9.5% up overall versus 2020, with large increases in all sectors except those vans under 2.0 tonnes.

SMMT data indicates that the 17,205 February registration total is 3,102 units more than in February 2020 and is the strongest February on record since 1998 (18,044).

Breaking down the results reveals the only disappointment was a 25.3% registration decline for vans under 2.0 tonnes. Registrations for vans between 2.0-2.5 tonnes increased 9.0% whilst demand from construction and online deliveries saw the between 2.5-3.5 tonne sector improve by 30.0%. The Pickup sector also recorded a 26.8% increase.

The Ford Transit Custom failed to hold on to the number one position, deposed by its big brother, the Ford Transit. Nevertheless, Ford still managed to place four of its product ranges in the top ten.  The Ford Transit in top spot followed by the Ford Transit Custom in second, the Ford Ranger in seventh place and Ford Transit Connect in eighth.

Top five LCV registrations

Top Five LCV Registrations

Capitalising on this registration momentum will be vital as the UK emerges from lockdown with an economic plan that encourages LCV growth and gives businesses confidence to upgrade to cleaner and more sustainable fleets.

The March Budget froze fuel duty rates for an eleventh consecutive year. This is likely to be the last year fleets can expect a freeze, as the Treasury commits to a net-zero emissions target by 2050. The ambitious targets set to address climate change and meet air quality goals mean the fastest way to achieve these goals is to instil business confidence and encourage the take-up of the latest low emission vehicles.

February used Light Commercial Vehicle (LCV) overview

  • LCV used market buoyant in February
  • Easing lockdown likely to determine how quickly the economy recovers
  • New stock shortages forcing franchised dealers to source late-plate stock

February has seen the used market in buoyant form overall, with prices remaining strong for anything that can easily be turned around quickly. Even the minibus sector that has struggled over the last 12 months due to COVID restrictions is seeing values firm as buyers look to stock up in readiness for the easing of lockdown regulations. Forward Control vehicles and 4×4 Pick-ups have also seen a performance improvement.

First-time conversion rates remain high for ready-to-retail panel vans, driven mainly by the expanding home shopping market. There has been a noticeable increase in damaged vehicles on offer, with the number of provisional sales increasing as well. With many of these turned into sales after the event, it is only those with damage now avoided by the trade. Demand remained strong for the small numbers of clean, late-year retail stock, forcing those prices ever higher. With a lack of new de-fleet stock to ease supply and demand issues, prices look set to remain high for at least the first half of 2021.

The severe shortage of new stock at dealerships is not only forcing fleets to run their vehicles for longer but is forcing franchised dealers into the used market to source late-year stock. This extra layer of competition for the trade is pushing prices ever higher. On the plus side, the recent lifting of government restrictions on the sale of repossessed vehicles should benefit the used market with an increase in volume over the next few months.

With global vaccinations on the increase, the easing of lockdown measures will determine how quickly the new market recovers, in turn, increasing volume in the used market.

Although sales at auction in February increased by just under 13% compared to January 2021, sales over the same month last year decreased by over 17%. Only 8.5% of those sales were less than 2 years old, whilst nearly a third of all sales were in the 2-4yr old age bracket.

Medium-sized vans again proved the most versatile and popular in the used market, increasing market share in February by 3.5% to 38.5% of all sales, followed by Small vans with 28%.

February in detail

Glass’s auction data shows the overall number of LCV sales in February declined by 12.9% versus January 2021, whilst first-time conversion rates decreased 1.5% to 84.2%.

Average sales prices paid in February increased by a dramatic 5.5% versus January and are now a staggering 36% higher than the same point last year. The average age of sold stock increased slightly from 68.8 months in January to 69 months in February and was 6.8 months younger than the same point last year.

Average mileages also increased from 75,532 miles in January to 79,936 miles in February and was just 311 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.

Only battery and hydrogen cars to be sold in the UK from 2035

The UK government has published the results of a consultation on banning new fossil-fuel vehicles. The document confirms a phased approach to zero-carbon-only registrations beginning in 2030.

The first step will see new petrol and diesel models banned from sale. Vehicles that can travel a ‘significant’ distance on zero-emission technology, including some hybrids and plug-in hybrids (PHEVs), will be sold until 2035. After this point, only zero-carbon technologies, such as battery-electric (BEV) and hydrogen fuel-cell electric vehicles (FCEVs), will be available.

Another consultation later this year will determine what constitutes a ‘significant’ distance that hybrid vehicles need to travel emission-free.

The consultation around the advancement of dates reviewed four key areas of concern over the plans. These included the readiness of the chargepoint infrastructure, the preparedness of the vehicle-manufacturing industry, inadequate battery supply, and the impact on consumers.

Some vehicle manufacturers raised concerns that hydrogen-fuel infrastructure provision had not yet been rolled out to an extent that would stimulate the uptake of FCEVs. These respondents stated that this is particularly important for ensuring all car and van market segments can transition to zero-emission, especially those that may not be suitable for BEVs.

However, in response to these concerns, the government highlighted the various funding schemes in place to increase infrastructure and support manufacturing. It pointed towards a report by the Faraday Institution that suggested 1.6 million BEVs a year would be built in the UK by 2040, with an additional 40,000 jobs created in the sector by 2030.

UK manufacturing

There is a mixed response amongst manufacturers over the future of their UK plants. Nissan and Jaguar Land Rover are dedicated to building BEVs in the country, with the Japanese carmaker bringing battery production to the UK. However, Stellantis is concerned about the UK’s 2030 ban and is in talks with the government to secure funding for the future of Ellesmere Port.

‘As soon as you say that we are going to ban the sales of this kind of car, we will stop investing,’ Stellantis CEO Carlos Tavares commented at the launch of the merged automotive group. ‘If we are told that in 2030, internal combustion engines cannot be sold in the UK, which we respect as a decision from the country, then we are not going to invest in ICE anymore because that makes no sense.’

In response to concerns over hydrogen, the consultation response document states: ‘The FCEV and hydrogen refuelling market is in its infancy and government has taken steps to support its growth in the UK. The transport decarbonisation plan will discuss the potential role for hydrogen in decarbonising the transport sector, including road transport.

‘In addition, we have announced plans to publish a hydrogen strategy, which will set out a whole system view of developing the UK hydrogen economy, including how we will work with industry to create 5GW of low-carbon hydrogen production for use across the economy by 2030.’

There was also discussion around eFuels, which can significantly lower the emissions from internal combustion engines. However, the consultation response highlights the unknown nature of emissions from this technology. ‘By 2035, zero must mean zero,’ it states.

Funding round

The UK government is launching a research and development competition for electrically-chargeable vehicle (EV) innovations. Those entering could benefit from a share of £20 million (€23 million) in funding. This comes following the publication of consultation results surrounding a ban on fossil-fuel vehicles from 2030.

The investment fund is part of the government’s drive to ‘build back greener’ following the economic damage inflicted by COVID-19. Technologies that could benefit include zero-emission emergency vehicles, charging technology or battery-recycling schemes. It hopes that the EV design and manufacturing sector could create around 6,000 skilled jobs.

‘Investing in innovation is crucial in decarbonising transport, which is why I’m delighted to see creative zero-emission projects across the UK come to life,’ commented transport secretary Grant Shapps.

‘The funding announced today will help harness some of the brightest talents in the UK tech industry, encouraging businesses to become global leaders in EV innovation, creating jobs and accelerating us towards our net-zero ambitions.’

Innovative ideas

Previous winners of government research investment include a zero-emission ambulance prototype. Designed by ULEMCo, it can reach speeds of 90mph and travel an average of 200 miles a day with zero-emissions. Another successful entrant was Urban Foresight, which used its £3 million share to develop ‘pop-up’ street chargers. These are located in pavements and provide discreet access to charging infrastructure for those without off-street parking.

The uptake of EVs is increasing in the UK. As the technology also plays a crucial role in the government’s ‘Road to Zero’ plans, more needs to be done to support the sale of the technology with new innovations and ease-of-access to infrastructure.

By releasing this latest funding now, the government also hopes to have new ideas and technologies in place in time for its ban on new fossil-fuel vehicles coming into action in 2030.

Video: Europe’s registrations struggle in February but improvements to come

Autovista Group Daily Brief editor Phil Curry discusses the registration figures from Europe’s big five automotive markets. While numbers may be down, the outlook for the whole year is more positive…

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

Show notes

Lockdown drives German new-car registrations down by 19% in February

February UK new-car registrations plunge to level of 1959

Significant downturns in European registrations in February

Conditional reopening of German car showrooms

England’s car showrooms to remain closed until 12 April

Podcast: How is European automotive adapting to pandemic and climate-change fallout?

Daily Brief editor Phil Curry and journalist Tom Geggus discuss key activities and developments in the European automotive sector from the past fortnight. These include COVID-19’s effect on the uptake of mobility-as-a-service (MAAS), different fuel types, and autonomous technology.

https://soundcloud.com/autovistagroup/consumers-post-covid-automotive-outlook

Show notes

Cazoo buys Cluno as CaaS options increase

Significant downturns in European registrations in February

Lockdown drives German new-car registrations down by 19% in February

February UK new-car registrations plunge to level of 1959

VW accelerates towards electric and digital future

VW aims for commercialised autonomous systems in 2025

Is it too early to go ‘EV-only’?

Ford to be zero-emission capable in Europe by 2026

Jaguar makes BEV and hydrogen changes on path to net zero

Volvo to go all electric and online by 2030

E-fuels gain awareness as Mazda joins alliance

February UK new-car registrations plunge to level of 1959

The ongoing restrictions on dealership activity resulted in a 35.5% year-on-year decline in new-car registrations in the UK in February 2021. Autovista Group senior data journalist Neil King explores the latest figures and the market outlook.

A total of 51,312 new cars were registered in the UK in January, according to data released by the Society of Motor Manufacturers and Traders (SMMT). The association highlighted that ‘the industry recorded its lowest February uptake since 1959.’

The UK emerged from its second lockdown on 2 December, only to see new regional restrictions imposed from 16 December. Subsequently, national lockdowns in England and Scotland were announced on 5 January, with ongoing restrictions in effect across the rest of the UK too.

There was a modest improvement in the market contraction in February, compared to the 39.5% year-on-year downturn in January. However, there were two fewer working days in the month than in January 2020 and, on an adjusted basis, the decline was therefore greater.

The UK registration figures continue to align with the Autovista Group expectation of a return to year-on-year declines of about 30% in countries where dealers are closed for physical car sales. The downturn in the UK during February, however, is larger than the 19% fall in Germany, where car showrooms are also closed. The contraction is also greater than in France and Italy, although dealers were open in these markets.

The only major European market to suffer more than the UK in February was Spain. Although dealers are open, the country is in a perfect storm, enduring a third wave of the pandemic, a weak economy and a fall in consumer confidence, in addition to the end of the RENOVE scrappage scheme and an increase in car-registration taxes.

EVs challenge diesels

UK registrations of petrol and diesel cars fell by 44.5% and 61.0% respectively, but still held a combined 65.3% share of the market. Registrations of standard hybrids (HEVs) also declined, by 22.8%, but the upward trend for plug-in hybrids (PHEVs) continued, with a 52.1% rise. Moreover, demand for battery-electric vehicles (BEVs) grew by 40.2% and electrically-chargeable vehicles (EVs) accounted for 13.0% of registrations, challenging diesel cars, which gained a 13.2% share.

February 2021 new car registrations SMMT

Source: SMMT

‘However, increasing uptake of these new technologies to the levels required by 2030 remains a mammoth task, with yesterday’s budget proving a missed opportunity given the lack of measures to support the market overall and notably the transition away from pure petrol and diesel cars and vans,’ the SMMT emphasised.

Delayed recovery

On 22 February, UK prime minister Boris Johnson outlined the roadmap for easing restrictions in England, with non-essential retail, including car showrooms, able to reopen no earlier than 12 April. In Scotland, this is expected from the last week of April. The next review of restrictions in Wales is on 12 March, with non-essential retail possibly able to reopen as soon as 15 March. A timetable for easing restrictions in Northern Ireland has not been announced, although a review is planned for 16 March.

Accordingly, Autovista Group’s latest base-case forecast has been lowered to 1.86 million units, equating to 14% improvement in new-car registrations in 2021, with further growth of 11% predicted in 2022. This is predicated upon vaccination progress preventing any further lockdowns in 2021 and new-car deliveries being largely unimpaired by semiconductor shortages and/or post-Brexit border delays. Similarly, the SMMT has revised its market outlook to 1.83 million new-car registrations in 2021, down from the 1.89 million units predicted in January.

In a downside scenario, however, greater disruption to new-car registrations (and supply) is assumed for 2021, further reducing the opportunity to recover losses later in the year. The forecast for this worst-case scenario is for UK new-car registrations to recover by only 10% in 2021, to about 1.79 million units, with further growth of only 9% in 2022.

In a more positive upside scenario, the UK automotive sector will emerge more positively, with dealers quickly returning to full operational capacity to meet increased demand. A less-severe impact on the wider economy would also bolster new-car registrations in 2021 and beyond. In this scenario, the UK new-car market is forecast to grow by 18% in 2021, to over 1.9 million units, and expand by 13% in 2022.

Dealers stifled

Mike Hawes, chief executive of the SMMT, commented; ‘these closures have stifled dealers’ preparations for March with the expectation that this will now be a third, successive dismal ‘new plate month’. Although we have a pathway out of restrictions with rapid vaccine rollout, and proven experience in operating click-and-collect, it is essential that showrooms reopen as soon as possible so the industry can start to build back better, and recover the £23 billion (€26.7 billion) loss from the past year.’

With car showrooms closed in most (and likely all) of the UK until at least 12 April, order intake will continue to be suppressed, further delaying the automotive recovery. An improvement in orders is expected in April, especially with the release of pent-up demand, but is unlikely to translate into significantly healthier registration volumes until May. Autovista Group estimates that the extended lockdown in the UK will result in the loss of approximately 200,000 new-car registrations between January and April, most of which will not rematerialise later in the year.

The Van’s Headlights: The Life and Times of a British Conglomerate

Successive UK politicians continue a generational battle to keep Britain’s homegrown manufacturing alive, even while pure economics would have consigned them to history many times over.

One particular manufacturing company that had more problems than many over the years, with name changes, mergers and buyouts rarely improving its profit forecast was the British powerhouse of British Leyland Motor Corporation Ltd (BLMC). In this article, Glass’s Chief Commercial Vehicle Editor, Andy Picton, takes a potted look at BLMC’s struggles with light commercial vehicles (LCVs).

History

BLMC formed in 1968 with the merger of British Motor Holdings (BMH) and Leyland Motor Corporation (LMC) and encouraged by the Wilson Labour Government (1964–1970), created an automotive group with a 40% UK market share. At its peak, BLMC owned nearly 40 different manufacturing plants across the UK.

Even before the merger, the BMH stable of marques competed with “badge engineered” cars and LCVs. The merger added more internal competition from the LMC marques. What followed was a story of ineffectual management, poor product design and quality, serious industrial relations problems and the 1973 oil crisis. Combined, this resulted in an unmanageable, financially crippled behemoth heading towards bankruptcy. The company’s 1970’s legacy created an infamous monument to the industrial turmoil of the period.

Many vehicles including LCVs were badge-engineering exercises offered under different brand names including Austin and Morris. For LCVs, this policy remained until 1970 when the Morris J4 and Austin 250JU became Austin-Morris products.

By the early 1970s, the outdated vans were rapidly losing ground to the Ford Transit and Bedford CF. Plans were put in motion to build and launch a new van that would equal the competition. The all-new Sherpa launched in late 1974, with both Leyland and Austin Morris badging.

Despite containing profitable marques such as Jaguar, Rover and Land Rover, as well as the best-selling Mini, British Leyland had a troubled history, leading to its eventual bankruptcy in 1975 and subsequent part-nationalisation.

The Wilson/Callaghan Labour Government (1974–1979) took control, creating a new holding company named British Leyland Limited (BL) of which the government was the major shareholder. The company was now organised into the following three divisions:

  • Leyland Cars
    • The largest UK car manufacturer
    • 128,000 employees
    • 36 locations
    • Production capacity one million vehicles per year
  • Leyland Truck and Bus
    • The largest commercial and passenger vehicle manufacturer in the UK
    • 31,000 employees
    • 12 locations
    • Production 38,000 trucks, 8,000 buses and 19,000 tractors per year
  • Leyland Special Products
    • A miscellaneous collection of acquired businesses

By 1977, all vans were sold under the Morris brand. A further change saw the Sherpa move into the Land Rover division in 1981, under the newly created Freight Rover brand.

By this time the Sherpa van was unsurprisingly dating quickly against the competition. Sales of the Transit far outstripped the Sherpa, whilst imported vehicles from Volkswagen, Fiat, Citroen, Renault and Iveco were gaining a foothold in the market.

Freight Rover

With the Sherpa under its wing. Freight Rover commissioned the K2 facelift in 1982 renaming it the 200. In 1986 the company introduced the wider bodied 300 van and chassis derivatives opening previously untapped sales opportunities.

Success followed and Freight Rover was moved into the Leyland Trucks Division. With improving profitability, the Freight Rover business caught the eye of General Motors in 1986. At this point, they made a bid to buy both the truck division and Land Rover from BL. The deal was vetoed by the British Government because they did not want to sell the iconic Land Rover brand to the American company. Although the truck division was still available for sale, GM’s interest waned and Dutch company, DAF Trucks, secured the purchase the following year.

DAF Trucks/Leyland DAF

The trucks were manufactured in Eindhoven, Holland and Leyland, Lancashire whilst the 200 and renamed 400 Series continued production in Washwood Heath, Birmingham. Both the trucks and vans were sold under the Leyland DAF banner in the UK.

By early 1988 planning for a much-needed replacement for the ageing 200/400 Series was progressing. With limited product development capabilities in-house, the styling of the new standard width and the wide-bodied van was outsourced to the Bertone design house in Italy.

The management team were not convinced the Bertone styling worked, with Leyland DAF wanting more of a family look between the vehicles. The work was outsourced again, this time to MGA, the designers who had worked on the K2 facelift and high roof versions. By the summer of 1988, with sketches completed, MGA produced clay models and then full-size prototypes codenamed LDV201 and LDV202

An overall lack of finances at Leyland DAF at this time, combined with strong sales of the 200/400 series  – 13,234 sales and a 15.6% market share in 1992 – meant the company was under pressure to launch the new van range. Increasing costs meant the new project would be mothballed until Renault was brought in to partner the programme in 1989. Sadly, a lack of direction saw the whole project cancelled by Leyland DAF in 1993, deciding to develop the existing Sherpa models instead.

The proposed facelift did not see the light of day, as continued financial difficulties forced Leyland DAF to file for bankruptcy later that year.

Renault

With agreement sought from DAF, Renault took over the entire development. Recognising that their current Master van was ageing, the LDV201/202 programme was abandoned in favour of a single model that would be the basis for their new Master range of light commercials.

In 1995, Renault signed an agreement with Iveco to help develop a cab for the second generation Master, Mascott and third-generation Daily models. However, due to rising costs, General Motors Europe was brought in as another partner. The second-generation Master was launched in 1997, with rebadged GM versions of the Opel/Vauxhall Movano and alliance partner, the Nissan Interstar launching the following year. The third generation Iveco Daily also shared many panels and cab components, including the doors. Named International Van of the Year (IVOTY) in 1998, a facelift followed in 2003, with an all-new model debuting in 2010. It too was sold by Vauxhall and Nissan, with the latter promoted as the NV400.

GAZ Group

At the same time, the collapse of the project also allowed the International Automotive Design (IAD) Group, which had been engineering the vehicle for LDV, to join forces with Gorkovsky Avtomobilny Zavod (GAZ) Group of Russia. IAD used many of the existing features to develop the bodywork design and new independent front axle suspension of the old LDV201 for the all-new GAZ Gazelle van, pick-up and minibus range.

The GAZ Gazelle went into production on the 20th July 1994, with the first vehicles rolling off the production line on the 26th of August 1994. The Gazelle has gone on to be synonymous with light commercial vehicles in Russia and other Eastern European countries selling over one million units by August 2005.

Popularity has continued to grow, with GAZ now employing over 40,000 staff and operating 13 production sites in Russia as well as assembly facilities in Turkey and Kazakhstan. The Gazelle is now sold in 40 countries across Europe, Scandinavia, Latin America, Africa, Asia and the Middle East. By 2015, annual production had increased to nearly 69,000 units.

LDV Limited

Back in the UK, the Leyland DAF van business was sold off in 1996 and LDV Limited was formed. Both the 200 and the 400 were given facelifts and renamed the Pilot and the Convoy respectively. The Pilot was available in 1.9t, 2.2t and 2.6t gross vehicle weights, while the Convoy was available in 2.8t, 3.1t and 3.5t low roof (City), high roof (Hi-Loader) and Chassis variants.

The easy to maintain vehicles made them popular with operators such as Royal Mail, the Police and local authorities, with the Convoy achieving a market share of 10.5% by the end of 1998.

Although selling well, it was clear that the Pilot and Convoy origins which harked back to 1974 were completely out of date and out of tune with the current marketplace. A joint development programme was signed with Daewoo in 1998 with a plan to quadruple output to 80,000 units by 2005.

The Asian financial crisis of 1997-1998 hit Daewoo hard and the partnership with LDV ended in November 2000, when the Korean car manufacturer went into receivership. The replacements for Convoy, codenamed LD100 and the Pilot BD100 replacement, were dead in the water before they had started.

Not to be deterred, LDV dropped the BD100 and purchased the rights to the LD100 from Daewoo moving 6,000 tons of tooling by road and rail from Daewoo’s factory in Lublin, Poland to the Washwood Heath and the LDV Maxus was born.

Available in two wheelbases and three roof heights at either 2.8t, 3.2t or 3.5t GVW, the VM Motori powered 2.5TD engine with outputs of 95bhp, 120bhp and 135bhp, launched in February 2005.

The front-wheel-drive LDV Maxus received good reviews and was a regular sight in National grid, Royal Mail, AA and British police force liveries, being awarded Professional Van and Light Truck Magazine “Van of the Year 2005”.

However, the additional costs of ‘going it alone’ put LDV under further financial pressure, eventually going into administration later in 2005. US investors Sun Capital bought the company, only to sell them on to the Russian van maker, GAZ Group in July 2006.

Plans to expand production in Birmingham, add new product lines and enter new markets were announced. 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, these 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.

Shanghai Automotive Industry Corporation (SAIC)

LDV continued to sell its existing stock and the entity was sold in 2010 to the Shanghai Automotive Industry Corporation (SAIC).

The van continued in production and was manufactured under the MAXUS name for the Chinese market and selected left-hand drive markets in Europe, whilst with help of distributors The Harris Group, the same range was launched in late 2015 as the LDV V80 and EV80 for the UK, Ireland and right hand drive Europe.

As the MAXUS brand has grown globally and as its products became more established, the decision was made to realign the companies. As a result, LDV rebranded as MAXUS in 2020, coinciding with the launch of two new models; the all-new Deliver 9 diesel range replacing the V80/EV80 and the all-new small electric van, the e-Deliver 3. The e-Deliver 9 electric van launched at the end of 2020.

The remarketing risk of EVs

The remarketing of electrically-chargeable vehicles (EVs) is examined by Autovista Group experts in our latest webinar. The mixed approach across Europe to provide stimuli for EV sales is paying off, with forecasters predicting a 40% market share for the technology by 2030. Does the increase in registrations trigger new remarketing risks? The panel considers whether the increasing sales of EVs will impact RV performance over the next three years. It also looks at potential differences in risk between BEV and plug-in hybrids (PHEVs).

You can view the entire webinar below, or download the slide deck here.

Autovista Group will be running a number of webinars looking at automotive trends this year. To be notified of upcoming events, subscribe to the Autovista Group Daily Brief.

Used Car Market Update January 2021

Used Car Auction Wholesale Market

Whilst online shopping has become increasingly popular in the UK over the last few years, 2020 substantially accelerated this to the point that some households have been making most, or even all of their purchases via the internet. This has extended to the buying of cars, both new and used, with several companies launching operations offering this service. Because the sale of used cars has changed from being a largely “physical” process to a “virtual” one, the used car market has not suffered as drastically as may have been feared when lockdown was first introduced in March 2020.

As a result of this, the used car auction market had a relatively positive start to 2021 despite Lockdown-3, with improvements in both the first time conversion rate and sales volume. A first time conversion rate of 77.8% was 7.5% higher than in December, whilst sales volume was significantly higher – not that unusual given December is traditionally quiet, but a good result given it was not clear how long the current lockdown would continue.

First time conversion rate graph Jan 2021

The Glass’s Editorial team reported that buyer trends were similar to those observed in December, with lower graded cars continuing to struggle to achieve decent prices, or to even receive any bids at all. One interesting development was that the hammer prices of convertibles improved as the month progressed, even though much of the country was under snow!

Used Car Retail Market

With the country being in lockdown, and with no clear indication how long it would last, it was reasonable to expect used car retail sales for January to be relatively steady, and the figures suggest they generally were. The number of sales and their average value were very close to December’s results, at 100.2% and 99.1% respectively, and whilst the number of observations was generally lower in 2020, the overall trend for the average sale price was upwards. Remarkably, the average age of the cars was also virtually the same as for December – 49.5 months for January versus 49.4 months for December.

Used Car Retail Market Observations Graph - January 2020 to January 2021
Used car market average sale price graph January 2021

Glass’s live retail pricing tool GlassNet Radar includes data on the length of time cars spend on the forecourt before selling, and it reported that the average duration for January 2021 was 51.7 days. This was six days longer than in December, but that degree of increase is not unusual given the delays caused by the festive season and is only a little higher than the 49.9 days reported for January 2020.

Used car market average days to sell graph January 2021

Outlook

It is likely that the current lockdown will continue through to the beginning of March at least, so it is reasonable to expect that February’s used car wholesale and retail markets will perform in a similar fashion to January. Should there be an announcement of an easing of restrictions towards the end of the month, it may promote a surge in activity, especially in the auction market, but it is unlikely to lift the retail sector much, if at all, until those changes come into effect.

Launch Report: Hyundai Tucson – bolder and roomier

The new Hyundai Tucson has an assertive and bold design, with its front face combining the headlights and grille. The 3D rear-light signature echoes the progressive triangular headlight design and two-tone colour personalisation is now possible. As the new Tucson is longer and wider, it is roomier and more practical than its predecessor and has a large boot.

The modern and refined digital cockpit, featuring a flush-fitting 10-inch screen, is standard across the range and there is also a digital TFT screen directly in front of the driver. The materials, trim and build quality are all good and there are numerous ADAS and safety features, including a central airbag between the two front seats. A neat touch is the blind-spot monitoring system, which shows a digital feed from the left or right side of the car, depending on which direction is indicated.

The Tucson is offered with mild-hybrid (MHEV) petrol and diesel engines or as a full hybrid-electric vehicle (HEV), and a plug-in hybrid (PHEV) version will be available too. The trim lines are well composed and there are relatively few options, leading to well-equipped used cars.

With the leap forward in quality and roominess compared to its predecessor, the Tucson has the potential to attract a wider selection of consumers. The HEV version may present an attractive business proposition for buyers who are not yet ready to plug in.

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

Launch Report Hyundai Tucson February 2021

January 2021: New car registrations

With Lockdown-3 in full force dampening the spread of COVID-19, inevitably January new car registrations suffered. Although retailers have created ‘click and collect’ processes to maintain a level of sales, customers still prefer to see vehicles before they buy. It came as no surprise to see registrations falling 39.5% versus January 2020 (already down 7.3% versus January 2019). According to the Society of Motor Manufacturers and Traders (SMMT), total registrations for January stood at 90,249 cars, the worst start to a new car market for 51 years.

Demand was subdued for both the private and fleet sectors, with registrations down 38.5% to 37,946 and 39.7% to 51,002 respectively, while the small business sector was down 56% to just 1,301.

January 2020-2021 sector split graph

Data courtesy of SMMT

Pure diesel registrations fell 62.1% compared to last year to just 11,083 units. This is a collapse of 86% from their peak January 2016 figure of 82,311, even when you add the mild-hybrid diesel registrations of 6,221, a total of 17,304 is a decline of 79% from the high point.                                                                                                                                             

Despite the gloomy picture, there are some bright points. The SMMT reports that new emissions figures show 2020 registrations are the cleanest vehicles in history, with average CO2 emissions falling by 11.8% on the previous year. January registration figures also show battery electric vehicles (BEVs) increasing by 54.4% to 6,260 with a market share of 6.9%. Plug-in hybrid (PHEV) registrations also rose in January by 28% to 6,124 units.

The chart below compares the alternative fuel vehicle (AFV) volume in January 2021 with the prior year.

AFV Registration Comparison Graph

Data courtesy of SMMT

Looking ahead, February is usually the quietest month of the year for registrations with consumers preferring to wait until the new plate in March. This February will be no different, with an expectation for another fall in registrations as the nationwide lockdown will not be lifted until the beginning of March at the earliest. If the vaccine roll-out success continues and COVID-19 cases continue their rapid decline, then showrooms will reopen improving consumer confidence, translating into an upswing in business in the second quarter and beyond.   

New Light Commercial Vehicle (LCV) Market January 2021

The results for January show an overall positive start for 2021. However, this positivity masks large declines in all sectors except large vans. This sector single-handedly drove demand during January.

SMMT registration data indicates the LCV market grew by 2.0% in January. The 24,029 registrations, was 472 units more than in January 2020 and was the highest January volume since 1990 (24,094).

Breaking down the results reveals the only highlight was a 25.4% registration increase for vans between 2.5-3.5 tonnes. Registrations for vans under 2.0 tonnes declined 50.1% whilst vans between 2.0-2.5 tonnes declined 16.2%. Whilst pickup registrations declined by 25.8%, 533 new plug-in battery-electric LCVs joining UK roads, increasing the BEV market fuel type share to 2.22%.

Top five LCV registrations

Top five LCV registrations table Jan 2021

Brexit

The pandemic continues to affect the whole UK economy. While the UK automotive industry avoided tariffs following Brexit, the Rules of Origin (RoO) requirements hidden within the new legislation are creating new barriers to trade.

Before 1 January 2021, automotive products legally made in the UK could be sold anywhere in the UK and the EU. From 1 January 2021, automotive manufacturers must provide proof that at least 40% of the value of the parts in a finished vehicle exported to the EU originated in the UK. This threshold climbs to 45% in 2023 and 55% in 2027.

With increasing battery-electric vehicle production, the need for domestic battery production is vitally important. Without this, OEMs are less likely to invest in the UK.

The future must involve measures that can deliver long-term changes in the industry. With ambitious targets set to address climate change and air quality goals, the fastest way to achieve these goals is to instil business confidence and encourage the take-up of the latest low emission vehicles.

January used Light Commercial Vehicle (LCV) overview

The first half of January saw the usual seasonal slowdown, with conversion rates and prices easing in line with some of the older and higher mileage stock on offer. Demand remained strong for the cleanest retail stock, with the shortage of later plate Euro 6 vehicles forcing prices ever higher. With a lack of new de-fleet stock to ease supply and demand issues, prices look set to remain high for at least the first half of 2021.

With new vehicle production still below pre-pandemic levels, there is a severe shortage of stock, which is forcing fleets to run their vehicles for longer. As we move through the year, the rollout of the global vaccination programme and the easing of lockdown measures will determine how quickly the new market recovers, in turn, increasing volume in the used market.

With the recent lifting of government restrictions on the sale of repossessed vehicles, the used market should benefit from an increase in volume over the next few months.

Although sales at auction in January decreased compared to January 2020, conversion rates over the period increased by 2.7%. To highlight the shortage of late-year stock in the marketplace at present, only 6.5% of all vehicles sold during the month were less than 2 years old, whilst Euro 5 stock made up just under 31%.

Medium-sized vans again proved the most versatile and popular in the used market, accounting for over 35% of all sales, followed by Small vans with 30%.

January in detail

Glass’s auction data shows the overall number of LCV sales in January declined by 30.5% versus December 2020, whilst first-time conversions remained steady at 85.7% (85.9% – December).

Average sales prices paid in January increased by 8.2% versus December and were over 33% higher than the same point last year. January’s prices were the highest in the last twelve months and 3.5% higher than the previous best recorded in October. The average age of sold stock decreased from 72 months in December to 68.8 months in January and was 6.6 months younger than the same point last year.

In line with sales of younger vehicles, average mileages also decreased from 78,005 miles in December to 75,532 miles in January and were nearly 6,200 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.