Fuel Type: Plug-in Hybrid (PHEV)

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

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

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

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

Corporate structure

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

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

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

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

Sustainability needs

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

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

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

Further strategy

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

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

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

Germany: new-car registrations down 31% in January

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

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

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

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

Source: KBA

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

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

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

Brands and segments

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

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

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

Fuel types

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

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

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

Automatic Revolution Update

The automatic revolution

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

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

Improving technology – increasing registrations

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

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

UK car registration share by gearbox type graph

How have residual values fared over a similar timeframe?

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

3 year old residual value % of cost new graph

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

7 year old residual value percentage of cost new graph

Why has there been an increase?

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

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

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

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

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

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

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

Background

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

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

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

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

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

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

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

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

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

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

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

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

The current offering

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

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

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

The Future

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

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

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

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

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

Used Car Market Update December 2020

Used Car Auction Wholesale Market

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

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

Overall sale volume 2020 versus 2019 December 2020

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

First time conversion rate graph December 2020

Percentage original cost new graph December 2020

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

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

First time conversion rate graph split by fuel type December 2020

Used Car Retail Market

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

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

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

Average days to sell graph December 2020

Used car sales outlook

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

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

Alternative fuel vehicles

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

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

Used-car markets and RVs under limited pressure in 2021

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

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

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

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

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

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

Slight improvement for Germany

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

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

Source: CCFA, KBA, ANFIA, GANVAM, SMMT

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

RVs grow in 2020, face limited pressure in 2021

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

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

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

Spain: difficult year

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

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

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

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

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

Stable demand

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

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

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

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

COVID-19 and other market factors breed caution for 2021

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

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

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

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

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

Source: CCFA, KBA, ANFIA, ANFAC, SMMT

Post-Brexit Britain, incentivised Italy

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

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

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

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

Fuelling France

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

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

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

New Light Commercial Vehicle (LCV) Market December 2020

December is recognised as a quieter registration month, but with delayed pipeline orders now being delivered, the month proved stronger than expected. Registration data from the SMMT indicates the LCV market declined just 1% in December. The 27,283 vehicles registered brought the total year-end volume for 2020 up to 292,657 units compared to 365,778 units in 2019, a deficit of 20%. However, this result did allow LCV registrations for 2020 to exceed the quarter four SMMT forecast of 288,000 units.

In what has been an extraordinary and testing year for the commercial vehicle sector, with the backdrop of countrywide lockdowns, social distancing measures, redundancies, Brexit and the year-long concern of looming no-deal vehicle tariffs has all affected LCV demand during 2020.

Annual new LCV registrations 2016-2019 graph

The December segment breakdown reveals a 7.3% registration increase in vans between 2.5-3.5 tonnes sector was the only bright light. Registrations for vans under 2.0 tonnes and vans between 2.0-2.5 tonnes declined by 17.7% and 2.6% respectively. Unsettling times for the Pickup sector continue, with December registrations declining a further 29.9%. Pickup registrations for the full year were 35,691 units, down 32.7% on the 53,055 total in 2019.

Top five LCV registrations

Top LCV registrations table December 2020

Throughout 2020 the pandemic affected the whole UK economy and will continue to do so into 2021. Although a Brexit deal with Europe is now agreed, clarity over UK-EU trading relations coupled to the rollout of vaccinations is paramount to driving recovery and offering hope to both the van industry and the economy as a whole.

December Used Light Commercial Vehicle (LCV) Overview

The first half of December remained busy with auction houses confirming high levels of online sale activity with healthy conversion rates. In the run-up towards Christmas, the number of sales reduced but performance remained strong. Prices held steady in the majority of sectors with high bids continuing for retail-ready stock in the busy home delivery run-up to Christmas.

Some dealers took this as an opportunity to stock up on additional vehicles ahead of a possible shortage of quality stock, driven by adverse effects on the supply chain due to further lockdowns and the implications of a Brexit ‘no deal’.

Although sales at auction in December decreased compared to December 2019, conversion rates over the period increased by 3.9%. At the same time, Euro 5 stock made up over 60% of sales, highlighting the shortage of quality later year stock in the marketplace.

As we move through another period of lockdown, the outlook suggests further stock shortages through the first quarter of 2021. Demand for home delivery shows little sign of abating and as a result, prices in most sectors look set to remain high.

December in detail

Glass’s auction data shows the overall number of LCV sales in December declined by 33.3% versus November 2020 and by 4.6% over the past twelve months. First-time conversions decreased 1.8% on the previous month, with the 4×4 sector again most heavily affected.

December also saw average sales prices increase by 5.2% versus November and were 11% higher than the same point last year – the third highest in the last twelve months. The average age of sold stock decreased from 73.5 months in November to 72 months in December and was 2.1 months younger than the same point last year.

In line with sales of younger vehicles, average mileages also decreased from 78,205 miles in November to 78,005 miles in December. However, December’s average mileage is 560 miles higher 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.

Brexit deal introduces threshold to sourcing BEV components, or tariffs to apply

The Brexit deal has offered some relief to UK manufacturers of electrically-chargeable vehicles (EVs) following earlier reports that tariffs would be applied to exported vehicles that do not contain a certain quota of ‘locally-sourced’ components.

During negotiations, issues surrounding the number of components used in vehicles from outside Europe came to light. This problem especially affected EVs, where all pieces of the battery count as components and many of which are sourced from Asia.

Without a certain number of locally-sourced parts, vehicles would be subject to tariffs under World Trade Organisation rules, meaning EVs could see an additional 10% added to UK exports to the continent. For the purposes of any deal, locally sourced would mean components produced within the European Union and/or the UK.

In October 2020, this issue was reported as a sticking point in negotiations, with components from Japan and Turkey highlighted as being unable to count as locally sourced, despite the UK negotiating free-trade agreements with both countries. Manufacturers with plants based in the UK and the EU will need to prove that exported goods are European-made, with a specified threshold of parts, a move known as ‘cumulation’.

Battery threshold

The Brexit trade deal offers carmakers a slender lifeline, with a staggered transition period of three and six years. In this time, the number of locally-sourced components must increase; otherwise, tariffs will be introduced, in spite of a free-trade agreement.

Up until 31 December 2023, Annex Orig-2B: Transitional product-specific rules for electric accumulators and electrified vehicles, states that accumulators and battery cells must either be produced in the EU or comprise no more than 70% non-EU components before tariffs are introduced. Hybrid, plug-in hybrid (PHEV) and battery-electric vehicles (BEVs) can comprise no more than 60% non-EU or UK components.

However, following this period, a further stage has been included, whereby the threshold of non-local parts drops, with accumulators only allowed to feature a maximum 40% foreign components, battery cells 50% and hybrids, PHEVs and BEVs a limit of 55%, until 31 December 2026.

The rules for 2027 and beyond will be reviewed later, but not before 2025 after the first transition period has passed.

‘The review shall be done on the basis of available information about the markets within the parties, such as the availability of sufficient and suitable originating materials, the balance between supply and demand and other relevant information,’ the document states.

Sourcing components

The parts requirement could have a significant impact on automotive manufacturing in the UK, particularly in terms of where components are sourced. Currently, Toyota builds hybrid models in the country, while Nissan produces its BEV Leaf model for export to Europe. Other carmakers are also developing their UK lines for electrification, with BMW preparing to build the Mini Electric, and Jaguar Land Rover retooling their plants for upcoming models.

The terms of the deal mean that carmakers must find as many locally-sourced components as possible for EVs and hybrids to be built in the UK. Failure to adhere to the thresholds as laid out in the UK-EU deal will mean vehicles built in Britain will have a 10% tariff added when they are shipped. This will likely make them uncompetitive on the European market, impacting sales as a result.

The automotive industry is increasingly moving away from internal combustion engines (ICE) as CO2 targets mean zero-emission technology is the only way to meet mandates. Yet the supply of crucial components related to the battery and motors is dominated by companies and plants based in Asia, which do not count as locally sourced.

There is, however, an increasing drive for battery manufacturing in Europe, with several companies announcing the building of gigafactories on the continent. There is also a project to develop batteries in the UK, adding to the available local components’ roster. Many of these aim to be fully up and running by the middle of the decade, with production starting slowly in the next couple of years. This could represent a realistic opportunity of meeting both threshold targets.

Free trade

However, the complexities of trade agreements could also prove difficult to UK vehicle manufacturing. Japanese newspaper Nikkei reported that Nissan had chosen not to produce its upcoming electric Ariya SUV at its Sunderland plant, which is already tooled for production thanks to its manufacturing of the Leaf. Instead, the company will produce the vehicle in Japan and take advantage of free-trade deals with the EU and the UK to export the vehicle to these markets. However, Nissan has stated that it had no plans to produce the Ariya in the UK at all, according to Automotive News Europe.

These trade agreements could see other EV developments pulled out of the UK, while some European-based manufacturers may already be considering moving production of PHEVs and BEVs out of the country in case they cannot meet the first threshold deadline in 2024.

German new-car registrations down 19% in 2020

Germany saw the registration of 2.9 million new cars in 2020, down 19.1% on 2019. The latest figures from the Kraftfahrt-Bundesamt (KBA) show that 62.8% of these units were registered for commercial purposes, down 22.4%, while 37.1% of the market share was private, down 13%.

Bidding farewell to a year of unprecedented challenges, the German market was able to end 2020 on a marginally positive note. A total of 311,394 passenger cars were sold in December last year, up 9.9% on the same period from 2019. Accompanied by an 8.4% rise in September, the German new-car market only saw two months of registration growth in 2020. These upticks in the second half of last year represent a move away from the 61% plunge in April and 49.5% drop in May.

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

Data: KBA

While Germany appears to be leading the way with a recovering automotive market, difficulties continue across Europe as member states are battered by fresh pandemic waves. In December last year, French new-car registrations dropped by 11.8% compared to the same period in 2019. Italy felt a greater decline at 14.9%, while Spain saw just 13 fewer registered units than December 2019. However, Germany does not appear to be out of the woods yet.

Climbing infection rates have triggered an extension of the country’s lockdown measures until the end of January. This makes a positive start to this year seem even less likely as dealerships must remain closed, except for the service departments. While Autovista Group’s Schwacke expects to see a recovery to just under 3.1 million new-car registrations in 2021, it predicts figures will be below those in previous years, and significantly below 2019’s peak.

New-car registrations, EU4, y-o-y % change, January to December 2020

Automotive sales recovery tracker full year Europe 2020

Data: CCFA, KBA, ANFIA, ANFAC

Drives and segments

With the largest share of last year’s market at 46.7%, a total of 1,361,723 petrol-powered cars were registered, down 36.3% on 2019. Meanwhile, 819,896 diesel-driven cars took a 28.1% share, down 28.9% on the previous year.

Alternative drives, consisting of hybrids, battery-electric vehicles (BEVs), hydrogen fuel-cell and gas claimed approximately a quarter of all new-car registrations in Germany last year. Hybrids achieved a share of 18.1%, up 120.6% on the previous period with 527,864 registrations, including plug-in hybrids (PHEVs) with 200,469 units, up 342.1% and with a market share of 6.9%. Electric cars represented 6.7% of the market, up 206.8% to 194,163 units. A total of 7,159 gas-powered cars were registered in 2020, down 6.1% on 2019, and LPG-driven cars saw a drop of 9.8%, to 6,543 units. CO2 emissions from cars fell by 11.0% last year, on average to 139.8g/km from 157.0g/km in the previous reporting period.

Over half of all registrations were accounted for by SUVs (21.3%), compact cars (20.5%) or small cars (15.1%). With 2.6% of the market, motorhomes saw the most significant increase, up 41.4%.

Brand performance

All German brands showed a decline last year. Smart took the hardest fall at 67.3%, followed by Opel, which dropped by 32.3%, then Ford down 30.6%. VW fell by 21.3% on the previous reporting year, Audi slumped by 19.9%, Porsche was down by 16.3%, BMW dropped by 13.7%. Negative results were also reported by Mini (down 11.7%) and Mercedes (down 10.6%). With a share of 18%, VW held the largest share of the new-car market in 2020.

For imported brands, both Tesla (up 55.9%) and Fiat (up 0.2%) reported positive results for 2020. Meanwhile, declines were recorded by Suzuki (down 44.8%), Ssangyoung (down 40.2%), Mazda (down 38.1%) and Dacia (down 36.6%). Skoda led the imported brands with a market share of 6.2%, followed by Renault with 4.3%.

Alternative drives made up a quarter of German registrations in 2020

Alternative drives, consisting of hybrid, fuel-cell, gas, hydrogen, and battery-electric vehicles (BEVs), claimed approximately a quarter of all new-car registrations in Germany in 2020. This result came in a year defined by COVID-19, when registrations in the country declined by roughly 20%.

The country’s government sought to use the pandemic as a springboard for a greener economy, with a greater emphasis on electromobility. In November last year, it committed a €4 billion stimulus package to the automotive sector, with funds being channelled into the adaptation of production lines and incentivising the purchase of electrically-chargeable vehicles (EVs).

An electric transformation

With the Kraftfahrt-Bundesamt (KBA) reporting the number of newly-registered BEVs increased by 206% in 2020, compared with 2019, the German automotive market does look to be on track for an electric transformation. Some 13.5% of all newly-registered passenger cars in the country now sport an electrified drivetrain, from BEVs to plug-in electric hybrids (PHEVs) and fuel-cell electric vehicles (FCEVs). The federal states of Schleswig-Holstein, Berlin and Baden-Württemberg played host to a high share of these new EV registrations last year, at over 16%.

‘E-mobility is now at the heart of mobile society. Positive user experiences, reliable technologies and a growing range of products facilitate the switch to e-mobility. With a sustained trend for registrations of vehicles with electric powertrains, around 22% in the last quarter of 2020, the government target of seven to 10 million electric vehicles registered in Germany by the year 2030 can be achieved,’ said KBA President Damm.

Segments and brands

The small-car segment was the strongest, accounting for 29.9% of registrations of new BEVs in 2020. Meanwhile, SUVs made up just under a fifth of the registration volume of new BEVs. The compact segment also reached a high share of this type, with 19.6%.

For BEVs, private registrations made up almost half of all registrations, at 48.8%. For all alternative powertrains, two-thirds were commercial (63.5%), and one third (35.4%) were private. Overall, some 63% of all new-car registrations, including petrol and diesel, were registered for commercial use in 2020.

A total of 394,940 new EVs were registered last year. VW passenger cars claimed the highest market share at 17.4%, up 608.6% compared with 2019. Meanwhile, Mercedes enjoyed a 14.9% share, up 499.8%, and Audi took 9%, up 607.9%. A total of 194,163 new BEVs were registered in the country in 2020. The VW brand claimed a 23.8% share of this volume, representing a 463.3% increase on the previous year. Renault then followed with a share of 16.2%, up 233.8%, and Tesla captured 8.6%, up 55.9%.

VW achieved the largest share of the EV parc, with 16%, pulling ahead of BMW at 12.3%, and Mercedes at 12.1%. For BEVs, VW claimed a 20.2% share, this time ahead of Renault at 18.1%, Smart at 11.6% and Tesla at 11.1%.

Around 70% of the battery-electric car parc was allocated to the small-car (33%), compact (19.6%) and mini (17.3%) segments. The stock of battery-electric passenger cars in the SUV segment, which has a high number of registrations, reached a share of 14.4%.

While the KBA has yet to confirm the total number of new-car registrations in 2020, at the end of last year Autovista Group’s Schwacke projected a recovery to just under 3.1 million in 2021. This would follow an expected registration volume of 2.9 million new cars in Germany in 2020.

The Van’s Headlights: The Ford Ranger Wildtrak

The Van’s Headlights

Despite increased competition over the last few years, sales of Pick-ups have grown consistently since 2012, with over 50,000 UK registrations each year over the last three years. One consistent performer over this time is the Ford Ranger. The pick-up of choice for many, sales of the Ranger since 2016 have equated to nearly 30% of all pick-up sales in the UK during this time.

Even with a reduction in the number of players in the Pick-up sector over the last 12-18 months and the ravaging effects of the COVID-19 pandemic on the industry, Ford continues to outsell the competition. Although overall sales are down twenty thousand to the end of November 2020, the Ford Ranger remains as popular as ever. Nearly 11,700 units have been registered in that period, amounting to 35.3% of the overall pick up sector total. In this month’s edition of The Van’s Headlights, the team consider the merits of the best-selling pick-up in the UK, the Ford Ranger (1998–).

The Ford Ranger Wildtrak

In the USA, the history of the Ranger name started decades before it was used on a pick-up truck. In 1958 Ford had experimented with the name on the Edsel Ranger sedan. This was followed in 1967 with the launch of the fifth-generation F-Series pick-up. The top of the line trim for the F-100 and F-250 was called the Ranger. In 1970, a higher specification Ranger XLT was added to the range.

By the early 1980s, a bigger F-150 had been introduced, taking most of the sales from the F-100. Ford recognised that there was a gap in the market for a smaller pick-up. Already in their line up, but built by Mazda, was the Ford Courier pick-up.

In 1982, Ford of America axed the F-100 and the Courier pick-up and ushered in its first compact pick-up, the Ranger. Continuing to be produced by Mazda, the first generation Ranger offered two trim levels, the XLT and the Lariat selling over 250,000 units in 1985 alone.

The second-generation Ranger was launched in 1993 with a major redesign. The grille size was reduced substantially, creating a smoother, more aerodynamic face, whilst flared wheel arches created a more rounded look. In 1994, the Mazda produced Ranger was replaced by a Ford produced Ranger and rebadged as a Mazda B-Series for far-eastern markets. In 1998, an electric Ranger was added to the range for the US market. It had a range of 65 miles and a top speed of 65mph. Up to 400 of them still exist today.

1998 saw the launch of the third-generation Ranger pick-up in the US. An extended Super Cab featuring a second row of ‘jump seats’ in the rear was a design unique to the Ranger, whilst an additional XL trim level was added. However, the compact pick-up market was under pressure from the bigger full-size pick-ups. Sales were declining and by 2008 were barely reaching six figures. Ford decided to pull the plug on the Ranger just four years later with sales at an all-time low of just 19,000.

Ford was not done with the Ranger though. It had noticed how big the compact pick-up market had become in other world markets and how well the rebadged Mazda B-Series had performed against competition from Toyota, Mitsubishi and Isuzu in particular.

International markets

During 1998, Ford launched the Ranger name on the international market, rebadging the Mazda B-Series until 2006. Launched with 4×2 and 4×4 configurations, Regular, Extended Super Cab and Double Cab variants and several trim levels, the Ranger was well placed to compete. The higher specification Wildtrak trim level was introduced to the UK line-up in September 2005.

The second-generation international Ranger was produced between 2006 and 2011, this time derived from the Mazda BT-50 pick-up which replaced the B-Series.

The partnership with Mazda ended in 2011 with Ford producing the third-generation Ranger independently. Designed by Ford Australia, the Ranger was sold across five continents and 180 markets with 4×2 and 4×4 drivetrains and up to five trim levels. New styling saw a move towards the leisure utility market. The same off-road ruggedness was linked to curvier, more aerodynamic lines typically associated with an SUV. A 2.2TDCi engine with outputs of 125PS or 150PS and a 3.2TDCi 200PS unit powered the Ranger, with the latter mated to a 5-speed manual or 6-speed automatic transmission.

The Ranger was given a major facelift in 2015, receiving enhancements including revised engines and a more muscular look that included a new grille, slimmer headlights, new bumpers and revised headlights. More equipment including DAB radio featured as well. SYNC2 connectivity became standard on the Limited and Wildtrak models, whilst options included lane-keeping alert for the first time. At this time, the 2.2TDCi 125PS and 150PS outputs were dropped in favour of more powerful 130PS and 160PS units. Euro 6 compliant variants were introduced in 2017.

The third-generation Ranger launched in the summer of 2019 with a raft of improvements. Featuring an all-new set of 2.0-litre EcoBlue diesel engines offering 130PS, 170PS and 213PS and new 6-speed manual or 10-speed automatic transmissions. The new UK version includes a revised front bumper and all-new grille, new exterior colours and premium LED headlamps on higher series versions and an all-new top-of-the-range Raptor model.

At the same time, following huge increases in US compact/mid-sized pick-up sales, Ford also re-launched the Ranger back in to the American market.

The all-new Ranger due for launch in 2022 will be developed by Ford Australia and manufactured at the Ford Silverton factory in South Africa. It will be a collaboration with Volkswagen who will rebadge the pick-up as the Amarok.

Something for everyone

Andy Picton, Glass’s Chief Commercial Vehicle Editor recommends the Ford Ranger as “a long-established pick-up that has been the preferred choice by operators for many years. The Ranger offers something for everyone, with workhorse and lifestyle users equally catered for.”

Andy added, “With its impressive working credentials, towing capabilities and extensive specification list, it’s easy to see why the Ranger is so popular. Equally capable on-road or off, the Ranger is reliable, tough and attractive and benefits from the support of Ford’s strong Transit Centre dealer network”.

The Ford Ranger Pick-up range

Euro 6d-Temp Diesel engines
4×2 and 4×4 drivetrains
Manual and automatic transmissions
Body styles
– Regular Cab
– Extended Super Cab
– Double Cab
Six trim levels
– XL
– XLT
– Limited
– Wildtrak
– Thunder
– Raptor

Ford Ranger Wildtrak 4×4 3.2TDCi 200PS Auto D/Cab Pick-up (2016-2019)

Ford Ranger Wildtrak 4x4 3.2TDCi 200PS Pick-up (2016-2019) interior

Standard specification on the Ranger 4×4 XL 2.2TDCi 160PS double cab included DAB radio with USB, AUX and Bluetooth, body-coloured front bumpers, electrically operated and heated wing mirrors, electric front windows, Ford Easy-Fuel capless refuelling system, Electronic Stability Control (ESC), drivers airbag and 16-inch steel wheels.

Additionally, the recommended 2018 Ranger Wildtrak 4×4 3.2TDCi 200PS Double cabadded a plethora of additional equipment as standard. This included; a choice of either manual or automatic transmission, 18-inch machined alloy wheels, bed liner, moulded side steps, aerodynamic sports bar, power-folding heated door mirrors with puddle lights, rear parking sensors and 12v power socket in the load area.

A liquid metallic grey finish featured for the new trapezoidal grille, side mirrors, door handles, side air vents, load-bed rails and tail lamps, exclusive rectangular fog lamps, and bold Wildtrak graphics that stand out against the new signature exterior metallic Pride Orange finish. Inside, the premium design continued with exclusive heated black and orange sport seats incorporating an eight-way power-adjustable driver’s seat, dual colour digital displays, 8-inch touchscreen, chrome effect air-vent rings, DAB radio/CD/SD-Nav system with 8” TFT touchscreen, Ford SYNC2 with voice control, USB and Bluetooth, steering wheel-mounted controls, cruise control, Dual-Zone Electronic Automatic Temp Control (DEATC), rear privacy glass, soft-touch instrument panel top with orange accent stitching and ambient interior lighting.

Ford Ranger Wildtrak Auto vehicle details table

2018 Pros	2018 Cons
Comfortable drive	Not the ‘greenest’ pick-up
Good level of specification and safety aids	3yr/60k warranty shortest in sector
5-star SCAP crash rated	The six-speed automatic is a little sluggish
Can tow uo to 3,500kg	Uncomfortable offset pedals on the manual
Comprehensive model line-up	Engine is noisy
Plenty of low down pulling power	Fuel economy not the best in sector
Benefits from dedicated Transit Centre dealer network

Glass’s recommendation

Ford Ranger Wildtrak 4×4 3.2TDCi 200PS Auto D/Cab Pick-Up
Registration Plate: 2018/68
Mileage: 30,000 miles
Glass’s Trade £19,550 Excl VAT
Glass’s Retail £22,800 Excl VAT

UK 2020 new-car registrations show lowest annual volume since 1992

New-car registrations in the UK plummeted by 29.4% in 2020. Autovista Group senior data journalist Neil King explores the latest figures and the market outlook.

The lowest annual volume of new-car registrations since 1992 was recorded in the UK in 2020. The total for the year was 1,631,064 units, according to data released by the Society of Motor Manufacturers and Traders (SMMT). The UK emerged from its second lockdown on 2 December, only to see new regional restrictions imposed from 16 December. These led to a 10.9% year-on-year fall in new-car registrations during the month, with 132,692 new cars joining UK roads. Registrations of petrol cars (including mild-hybrid petrol) declined 32.9% in 2020, but still held a 62.7% share of the market. Demand for diesel cars (including mild-hybrid diesel) plunged 47.6%, accounting for just under a fifth of the market.

Registrations of hybrid cars grew by 12.1%. Following a dry spell as the UK Government removed grants for plug-in hybrids (PHEVs) in 2019, the technology enjoyed a resurgence in 2020, with registrations increasing by over 90%. Moreover, demand for battery-electric vehicles (BEVs) surged by 185.9% and electrically-chargeable vehicles (EVs) accounted for more than 10% of registrations, up from just over 3% in 2019.

New car registrations full year 2020 SMMT graph

Source: SMMT

‘Encouragingly, there is room for further growth as most of these [EV] registrations (68%) were for company cars, indicating that private buyers need stronger incentives to make the switch, as well as more investment in charging infrastructure, especially public on-street charging,’ the SMMT stated.

Mike Hawes, chief executive of the SMMT, added; ‘with manufacturers bringing record numbers of electrified vehicles to market over the coming months, we will work with the government to encourage drivers to make the switch, while promoting investment in our globally-renowned manufacturing base – recharging the market, industry and economy.’

The market contraction in December was in line with Autovista Group’s forecast for the month, and therefore for the year too. There is turbulence ahead as England and Scotland have reintroduced national lockdowns and there are ongoing restrictions across the rest of the UK. These measures will hinder the automotive recovery in the UK, at least in the short term. ‘While click-and-collect can continue to provide a lifeline, it cannot offset the impact of showroom closures. With a vaccine programme now underway, however, in 2021 there is the potential to drive a recovery that would also support the UK’s environmental goals,’ the SMMT commented.

Possible 21-29% improvement

Autovista Group’s latest base-case forecast predicts a 25% improvement in new-car registrations in 2021, to just over two million units, and further growth of 7% in 2022. This is predicated upon vehicle deliveries being largely unimpaired and the car market being able to recover from current lockdowns and restrictions later in 2021.

UK new car registrations forecast graph 2020

In a downside scenario, however, greater disruption to new-car registrations (and supply) is assumed for 2021, leaving limited opportunity for recovery of the losses later in the year. The forecast for this worst-case scenario is for UK new-car registrations to recover by only 21% in 2021, remaining below two million units, with further growth of only 5% in 2022.

In a more positive upside scenario, disruption to the UK automotive sector will be even more short-lived than in the base-case forecast, with dealers quickly overcoming supply shortages and returning to full operational capacity. The 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 29% in 2021, to over 2.1 million units, and expand by 9% in 2022.

No-deal averted

Furthermore, following a year of unprecedented difficulties, the European Union and the UK reached an agreement on Christmas Eve for a Brexit deal. This has averted the dreaded ‘no-deal’ scenario and accompanying tariffs on car imports and exports. ‘Given seven out of 10 new cars registered in the UK in 2020 were imported from Europe, the continuation of tariff- and quota-free trade is critical to a strong new-car market in the UK,’ the SMMT emphasised.

Nevertheless, as the UK no longer follows the EU’s rules on production standards, checks on goods have been introduced. This, in turn, creates more paperwork and red tape, which may result in delays if goods arrive at ports unprepared. However, the deal does include a 12-month grace period on some elements of the ‘rules-of-origin’ declarations, which require exporters to certify goods qualify as locally-sourced, allowing them to avoid tariffs. Businesses will have a year to obtain supporting documents form third-party suppliers, giving some companies more time to adapt.

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!

Mercedes-Benz goes on the electric offensive

Mercedes-Benz has announced where its upcoming battery-electric vehicles (BEVs) will be produced, as it goes on an electric offensive. Built in its factories in Germany, the US, and China, these new BEVs will be assembled alongside vehicles powered by internal combustion engines (ICE).

Mercedes-Benz revealed a total of eight EQ BEVs will be in production across seven of its locations by 2022. Spanning three continents, this production map will be essential for the carmaker to achieve its goal of electrically-chargeable vehicles (EVs) making up half of its sales by 2030. The electrification of the manufacturer’s entire product range is a key component of the ‘Ambition 2039’ strategy and a prerequisite on the way to CO2 neutrality.

‘With its ‘Electric First’ strategy, Mercedes-Benz is consistently on the path to CO2 neutrality and is investing heavily in transformation,’ said Markus Schäfer, member of the board of management responsible for Daimler Group Research and COO Mercedes-Benz cars. ‘Our vehicle portfolio becomes electric and thus also our global production network with vehicle and battery factories. We intend to lead in the field of e-mobility and focus in particular on battery technology. We are taking a comprehensive approach, ranging from research and development to production, and also including strategic cooperation.’

Global production

The first Mercedes-Benz electric luxury sedan, the EQS, will launch from Factory 56 in Sindelfingen in the first half of 2021. The electric EQA C-SUV will also be made at the Beijing plant in China next year, after initially entering production at the Rastatt plant in Germany this year. It is a similar story for the EQE, which will be built in the Bremen site in Germany and Beijing in China from next year. Meanwhile, the EQB compact will be built at the Kecskemét plant in Hungary in 2021. The EQS und EQE SUVs will be manufactured in Alabama, US, starting from 2022. The EQC business sedan is already built in Bremen and Beijing.

Battery systems will also be produced and assembled in Germany, Poland, Beijing and Alabama. ‘The local production of batteries is an essential success factor in our electric offensive,’ said Jörg Burzer, member of the board of management for production and supply chain. He explained that the carmaker already produces batteries in Kamenz, Bangkok and Beijing, with a network that is well-positioned for the EQ offensive. ‘The ramp-up of our battery plants in Hedelfingen and Jawor is imminent and our colleagues in Brühl and Tuscaloosa are already preparing to start production in 2022.’

‘The Mercedes-Benz production network is global, digital and flexible, and ready for the upcoming electric offensive – thanks, of course, to our highly qualified and motivated employees worldwide. We are now beginning a real Mercedes-EQ fireworks display,’ said Burzer.

‘Six electric product launches by 2022 underscore the strength and competence of our Mercedes-Benz production sites worldwide. The production network will have a total of six Mercedes-EQ car locations. Local production of highly efficient battery systems plays a central role in the Mercedes-Benz strategy – coupled with a comprehensive sustainability concept that spans the entire life cycle of the battery all the way to recycling,’ he concluded.

Making the battery market more sustainable

The European Commission wants to enforce mandatory requirements on all batteries entering the EU market, which includes applications within the automotive sector, alongside industrial and portable-uses cases.

This could include using responsibly-sourced materials with constrained use of hazardous substances, including a minimum amount of recycled materials, as well as carbon footprint, performance and durability. The Commission argues this would help develop a more sustainable and competitive battery industry across Europe and the wider world.

These requirements come as part of plans that will modernise EU legislation on batteries, focusing on greater sustainability throughout their lifecycle. They also address social, economic, and environmental issues tied to all types of batteries.

The changes complement the Circular Economy Action Plan, a core building block of the European Green Deal. The Commission argues these roadmaps promote competitive sustainability while enabling green transport, clean energy and the attainment of climate neutrality by 2050.

Sustainable and safe

The proposals set out the need for batteries placed on the EU market to become sustainable, high-performing and safe throughout their whole lifecycle. This singles out batteries produced with the lowest level of environmental impact, using materials sourced in full respect of human rights, following social and ecological standards. Under these proposals, at the end of their life cycle, these units should be repurposed, remanufactured or recycled, allowing valuable materials to re-enter the economy.

In addition, providing legal certainty would help unlock large-scale investment and boost the production capacity for innovation and sustainability, to help Europe respond to a fast-growing battery market. ‘Better and more performant batteries will make a key contribution to the electrification of road transport, which will significantly reduce its emissions, increase the uptake of electric vehicles and facilitate a higher share of renewable sources in the EU energy mix,’ the Commission argues.

‘Clean energy is the key to European Green Deal, but our increasing reliance on batteries in, for example, transport should not harm the environment,’ said Frans Timmermans, executive vice-president for the European Green Deal. ‘The new batteries regulation will help reduce the environmental and social impact of all batteries throughout their life cycle. Today’s proposal allows the EU to scale up the use and production of batteries in a safe, circular and healthy way.’

Collection and recycling

With its proposal, the Commission also aims to boost the circular economy of batteries, promoting the more efficient use of resources, and aiming to reduce the environmental impact. From July 2024, only electrically-chargeable vehicles (EV) with a carbon footprint declaration can enter the market.

To improve the collection and recycling of portable batteries, the 45% collection rate should increase to 65% in 2025, and 70% in 2030. Units from the automotive sector meanwhile have to be collected in full. This enables the recovery of valuable materials like cobalt, lithium, nickel and lead.

The use of new technology, like the battery passport and interlinked-data space, will help enable safe data sharing, increase market transparency, and make large batteries traceable throughout their life cycle.

‘This future-oriented legislative toolbox will upgrade the sustainability of batteries in each phase of their lifecycle,’ said commissioner for environment, oceans and fisheries Virginijus Sinkevičius. ‘Batteries are full of valuable materials and we want to ensure that no battery is lost to waste. The sustainability of batteries has to grow hand in hand with their increasing numbers on the EU market.’

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

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.

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.

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.

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.

Is the automotive industry heading for PHEVgate?

As the automotive industry continues to deal with the damage dealt by Dieselgate, environmental campaign group Transport and Environment (T&E) is asking whether another perfect storm is forming around plug-in hybrids (PHEVs).

With manufacturers aiming for emissions regulations targets, low-emission vehicles are essential. So in a period of electrification, PHEVs are bridging the gap between internal combustion engines (ICEs) and battery-electric vehicles (BEVs), for carmakers and consumers alike. Demand for PHEVs in the EU increased by 368.1% in Q3 2020, when compared with the same period last year. But results of a recent T&E study point to PHEVs as a bridge waiting to collapse.

‘Fake electric cars’

T&E commissioned testing of three of the most popular PHEVs sold in 2019; the BMW X5, Volvo XC60 and the Mitsubishi Outlander. The results revealed that in the real world, even when under the mildest testing conditions with a full battery, the cars’ emissions were higher than advertised. The Outlander emitted 86g/km of CO2, overshooting official WLTP values by 89%. The XC60 produced 115g/km, exceeding its official values by 62%. Meanwhile, the X5, surpassed its CO2 values by 28%, releasing 41g/km.

‘Plug-in hybrids are fake electric cars, built for lab tests and tax breaks, not real driving,’ said Julia Poliscanova, senior director for clean vehicles at T&E. ‘Our tests show that even in optimal conditions, with a full battery, the cars pollute more than advertised. Unless you drive them softly, carbon emissions can go off the charts.’

Offical vs real-world emissions of PHEVs T&E graph

Source: Transport and Environment

T&E estimates that once their batteries are depleted, the X5, the Outlander and the XC50 can only drive in engine mode for 11km, 19km and 23km respectively, before overshooting their official CO2 emissions per kilometre. The group argues, therefore, that PHEVs are not suited to long-distance journeys, and would require much more frequent charging than BEVs to keep their low-emissions label.

‘Carmakers blame drivers for plug-in hybrids’ high emissions. But the truth is that most PHEVs are just not well made. They have weak electric motors, big, polluting engines, and usually can’t fast charge. The only way plug-ins are going to have a future is if we completely overhaul how we reward them in EU car CO2 tests and regulations. Otherwise, PHEVs will soon join diesel in the dustbin of history,’ she said.

Poliscanova called for governments to stop subsidising the purchasing of these cars with taxpayer money. T&E added that the EU’s current practice of handing out additional emissions credits for PHEVs needs to end when it reviews the CO2 targets for 2025 and 2030.

In defence of PHEVs

When approached by Autovista Group, the manufacturers of the XC60, X5, and Outlander came to the defence of their respective PHEVs and their emissions testing. Volvo insisted that all of its cars are certified and fully compliant with emissions legislation, but do come with a real-world caveat. ‘The existing emissions-testing regime provides a useful industry standard that allows customers to make comparisons between cars, but real-world variations will apply,’ the carmaker said.

The manufacturer said that PHEVs have close-to-zero tailpipe emissions when driven in pure electric mode and its customer field data shows that its cars are driven in pure electric mode 40% of the time on average. ‘Plug-in Hybrids are an important transitional technology on the journey towards zero-emission mobility, and an important part of the mobility portfolio of the near future,’ Volvo stated.

BMW claimed that if a customer followed the exact WLTP and NEDC legislative test profile and conditions, the published fuel economy figures would be achieved. ‘The aim of the legislative test profile, however, is not the promise of a particular fuel economy figure in real customer life, but rather a basis to make vehicles of different brands, sizes and technologies comparable,’ the carmaker said. ‘A car with a good WLTP/NEDC figure will also convince in comparison with others in real customer life.’

BMW pointed to the potential for PHEV figures to also include a number to represent when a consumer does not charge the vehicle’s battery. ‘This might be a suitable step to increase the credibility around WLTP/NEDC and PHEV because the real-world fuel economy of a PHEV is heavily dependent on the charging state of the battery,’ BMW concluded.

Mitsubishi highlighted that their published MPG and CO2 figures are produced via standardised WLTP testing that was designed for PHEVs. ‘Independent tests can produce unreliable/variable figures depending on conditions and a variety of other factors and we naturally contest any findings where we have no oversight of the testing or methodology,’ the carmaker said. ‘Disregarding a PHEV’s electrical powertrain during testing, for example, is like testing a petrol or diesel car and only using three of its gears.’

Transitional technology

Mitsubishi pointed to a presumption that PHEV drivers do not plug in, so it shared the results of two surveys it commissioned which investigated Mitsubishi owner usage and attitudes. The data showed that 92% of Outlander owners charge up multiple times per week (at least two to three times) and that PHEV owners drive in electric mode (using no petrol) during 72.2% of their commute and 84.3% of errand and school runs. Even on long leisure runs, 32.8% of the journey was conducted in EV mode. What is more, 70% of Outlander owners surveyed would consider a fully electric vehicle as their next purchase, compared to just 27% of ICE drivers. Mitsubishi said this was indicative of the important role that PHEVs play as a transitional technology.

‘They [PHEVs] ease people into electrification, helping them to realise they actually could live with an EV day-to-day, while they also produce lower emissions overall than traditional ICE vehicles,’ the Mitsubishi said. The manufacturer explained that EVs are still too expensive for most people, with the range at the more affordable end of the model spectrum not enough for what consumers feel comfortable with. It went on to add, ‘that’s before you factor in the charging infrastructure which is still hopelessly inadequate even for what’s on the road now, let alone mass adoption over the next decade.’

‘We are completely on board with the need to decarbonise as soon as possible, but it needs to happen in stages and plug-in hybrids can be a very useful tool in accelerating and supporting that transition, especially if incentivised and encouraged properly by the government,’ Mitsubishi concluded.

As electrification surges on, it makes sense that consumers and carmakers alike need a transitional vehicle which can endure the cross over, while initial costs are lowered and charging infrastructure is strengthened. However, it is vital that the low-emission capabilities of these vehicles is as sold, both in terms of trust and climate change. In the wake of COVID-19, the last thing the automotive industry needs is another Dieselgate.

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.

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.

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.

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.

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.

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 31^st 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 31^st 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

Model	Current Production	Future Production
Ford Ranger	Silverton, South Africa	Silverton, South Africa
Great Wall	Boading, China	Boading, China
Isuzu D-Max	Phrapradaeng, Thailand	Phrapradaeng, Thailand
Mercesdes-Benz X-Class	Barcelona, Spain	–
Mitsubishi L200	Laem Chabang, Thailand	Laem Chabang, Thailand
Nissan Navara	Barcelona, Spain	Rosslyn, South Africa
Renault Alaskan	Barcelona, Spain	Rosslyn, South Africa
SsangYong Musso	Pveontaek, South Korea	Pveontaek, South Korea
Toyota Hilux	Prospecton, South Africa	Prospecton, South Africa
Volkswagen Amarok	Hannover, Germany	Silverton, 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.

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