Fuel Type: Plug-in Hybrid (PHEV)

Brexit survey: have your say

There are only 70 days until the UK’s Brexit transition period with the European Union (EU) comes to an end. Currently, there is still no certainty on future trading relationships, or how the UK setting its own regulations will affect businesses and technology developments in the coming years.

Autovista Group wants your views on Brexit, from the impact a ‘no-deal’ would have on the automotive industry in both Europe and the UK, to your opinions on how the two parties have managed the process.

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

Modern classics soaring in desirability

Classic car ownership has never been so popular. Many collectors aspire to own popular models like Jaguar’s enigmatic E-Type Lightweight or Ford’s Capri. Whilst gaining ownership of the Capri might at least be possible for some, with price tags starting around £1,000,000, the very special E-Type is out of reach for those on a budget. Even standard E-Type’s have asking prices starting around £50,000, with some currently advertised at more than double that level. Due to COVID-19, there is the potential that an increased volume of classic cars will rotate back into the marketplace, as the economy bites and unemployment rises.

As we look ahead and consider the classic cars of the future, it is worth considering some of the elements that make them appealing in the first place. It helps if they are a good-looking car, and a sporting pedigree often enhances appeal and value. However, possibly more important is that people have an emotional connection with the model. Today, it is increasingly apparent that a special reminder of one’s youth is highly prized.

Finally, the scarcity of a model has a major effect on desirability and value. Strangely, it also helps that many of the cars considered classics today, were not built to a high standard. Due to this, many were destined for early graves at the scrapyard.

In the year 2000, there were 24.4 million cars on UK roads. In 2019, there were nearly 32 million. Interestingly, the proportion of older cars has increased, with just over 2.3 million cars over 13 years of age in 2000, increasing to over 6 million in 2019. Saving old cars of interest has become big business, fuelled by an ever-increasing nostalgia for modern classics. Ford Escorts and Fiestas, Volkswagen Golfs, and Peugeot 205 GTis from the eighties and nineties are highly desirable today.

Glass’s Leisure Vehicles Editor Paul McDonald said, “Following a significant boost in registrations over the last few months, a slow-down in September was not unexpected, as recent growth was partly a result of pent-up demand following lockdown. So, to see the increases continue is great news”.

With the major auction groups continuing to hold only online sales, some buyers continue to be wary about spending substantial amounts of money on vehicles they have seen in person. However, this trust continues to improve as buyers become more accepting of the descriptions provided by the auction houses.

Additional factors affecting the popularity of older cars

By the mid-nineties, car build quality and reliability had improved dramatically whilst the driveability of cars had also taken a step forward. New cars of today continue these improvements, but many people are choosing to look for older, more characterful cars to drive every day. This is not only down to the price, fueling the demand many enthusiasts strive to drive something unique and with historical interest.

There is no definitive age that identifies a classic car. Many hold the view that a modern classic will be at least 15 years of age, and a classic must be at least 25 years old. However, if you use car tax exemption as a guide, then the car needs to be at least 40 years old.   

Many people find driving a modern classic car is without status, which is a very desirable commodity in today’s world. Especially if a modern classic is relatively easy to afford. So, looking ahead, there are models that could already be considered modern classics. It is also worth remembering that with improved build quality more survivors of each vehicle could also affect the future asking prices.

The following examples are all over 15 years of age and remarkably can be bought today for under £1,000. As beauty is in the eye of the beholder, the decision on whether they are a modern classic is yours.

  • 2003       Jaguar S-Type V6 SE Plus                               £999
  • 2003       Mercedes-Benz SLK200 Kompressor              £995
  • 2001       Audi TT 1.8T Quattro 2dr                                 £999
  • 2000       Land Rover Discovery GS                               £995
  • 2004       MG TF 1.8                                                       £990

Automotive industry worries as Brexit no-deal seems likely

With a deadlock in Brexit trade-deal negotiations following the passing of a UK-imposed deadline, both the British and European automotive industries are nervous about the looming threat of a no-deal scenario.

Last week, the UK government signalled that ‘the talks are over’ in regards to a free-trade agreement with the European Union (EU). Prime Minister Boris Johnson added that the country has to ‘get ready’ to trade in 2021 without an agreement, although stopping short of confirming that discussions would not resume. Government television messages are running in the UK warning businesses to get ready for change from 1 January 2021.

While the EU is keen to continue talking, the UK government is now giving businesses in the country warning that the likelihood of any deal is diminishing rapidly, and they should prepare for tariffs and customs checks. For the automotive industry, which relies on competitive pricing and ‘just-in-time’ deliveries, this is a hammer blow – particularly for those companies based in Britain.

Government response

The UK is looking for a ‘Canada-style’ deal. The EU’s agreement with Canada is called the Comprehensive Economic and Trade Agreement (CETA), which removes most tariffs, but not all, while increasing quotas, meaning more goods can be shipped before tariffs are applied. Instead, it looks likely that an Australian-style deal will be adopted. This means tariffs on imports and exports to and from the EU, together with stricter customs checks at borders.

‘We were totally clear that we wanted nothing more complicated than a Canada-style relationship, based on friendship and free trade,’ Johnson said last week. ‘To judge by the latest EU summit in Brussels, that won’t work for our EU partners. They want the continued ability to control our legislative freedom, our fisheries, in a way that is obviously unacceptable to an independent country.

‘Given that they have refused to negotiate seriously for much of the last few months, and given that this summit appears explicitly to rule out a Canada-style deal, I have concluded that we should get ready for 1 January with arrangements that are more like Australia’s, based on simple principles of global free trade.’

The Chancellor of the Duchy of Lancaster Michael Gove, added: ‘At the end of this year we [the UK] are leaving the EU Single Market and Customs Union and this means there are both new challenges and new opportunities for businesses. Make no mistake, changes are coming in just 75 days and time is running out for businesses to act.

‘It is on all of us to put in the work now so that we can embrace the new opportunities available to an independent trading nation with control of its own borders, territorial waters and laws.’

Automotive outcry

Numerous carmakers and suppliers have stated over pat months that should a no-deal occur, they would seriously consider their manufacturing positions in the UK. In contrast, others have highlighted the problems that such a scenario would pose on importing items into the country.

The Society of Motor Manufacturers and Traders (SMMT) has stated that with tariffs added, the cost of a UK-built car could rise by as much as £2,700 (€3,000). Recently, it was reported that Toyota and Nissan would look for compensation from the UK government should such costs be added, as to export their vehicles for sale in the EU with tariffs added would make them less competitive than those from European-based marques.

Volkswagen has warned that it would be unable to absorb any tariffs placed on vehicle imports. The carmaker has no manufacturing presence in the UK. As the country’s second-largest brand by market share (according to SMMT figures), it is possible the company will look to stockpile vehicles in the country before the end of the transition period.

Responding to the Prime Minister’s statement, Mike Hawes, chief executive of the SMMT, said: ‘Make no mistake, the automotive industry will not prosper from ‘no deal’. It would have a devastating impact on the sector, on the economy, and on jobs in every region of Britain.

‘Businesses have been battling coronavirus at the same time as investing heavily in decarbonisation, all while preparing as best they can for a seismic change in trading conditions come year-end. But to avoid permanent damage, we urge both sides to keep talking, to remain calm but work with renewed vigour on a deal that supports automotive, a sector that is Britain’s biggest exporter of goods and one of the UK and Europe’s most valuable economic assets.’

According to Reuters, when asked about Brexit trade talks at a recent speaking event, Daimler chairman Ola Källenius– said: ‘I am hoping for last-minute common sense,’ before confirming that the company ‘would have to live with tariffs’ and has no plans to open any manufacturing plants in the UK to avoid them.

Bentley chief executive Adrian Hallmark told Reuters that a Brexit no-deal would be ‘extremely damaging’ for the Volkswagen Group-owned luxury carmaker.

‘If you took the duties on components, 45% of the bits we buy in, and the 10% tariff on cars, worst-case scenario, it would take out a significant percentage of our profits,’ he said. ‘(It) would probably ACEA appeals to EU

Furthermore, the European Automobile Manufacturers Association (ACEA) has written to Brussels urging the EU parliament to ‘reconsider its position’ on a trade deal with the UK, according to the Financial Times

The body’s demands include the EU lowering the percentage of components in a car that must be either European or British for the vehicle to qualify for the benefits of any EU-UK trade deal, a process known as ‘cumulation’. ACEA is also seeking a ‘phase-in period’ of these new rules to help the industry adapt to the changed business environment.

The EU looks unlikely to sanction parts from Japan and Turkey that could count towards ‘local-parts’ figures. Manufacturers with plants based in the UK will need to prove that exported goods are actually British-made, with a specified threshold of British parts. Should the threshold not be met, tariffs will be included on exports, even if a trade deal is in place.

Brussels has proposed that non-UK/non-EU content be limited to 45% of the car, a figure ACEA wants pushed up to 50% ‘in line with the UK’s position.’

Autovista Group is keen to hear your views on Brexit and the effect it will have on both the UK and Europe. Look out for our in-depth Brexit survey launching tomorrow (22 October) and make sure you have your say.

Motorcycle Market Update October 2020

Following a significant year on year registration increase in July and August (up 42% and 32% respectively), data published by the Motorcycle Industry Association (MCIA) shows that registrations grew by a more modest but still impressive 11.7% in September. Six out of the nine sales categories recorded growth with mopeds enjoying the strongest increase, followed by scooters.

Glass’s Leisure Vehicles Editor Paul McDonald said, “Following a significant boost in registrations over the last few months, a slow-down in September was not unexpected, as recent growth was partly a result of pent-up demand following lockdown. So, to see the increases continue is great news”.

With the major auction groups continuing to hold only online sales, some buyers continue to be wary about spending substantial amounts of money on vehicles they have seen in person. However, this trust continues to improve as buyers become more accepting of the descriptions provided by the auction houses.

Engine band highest registered models – September 2020

Power Band Model

0-50cc Lexmoto ECHO PLUS 50
51-125cc Honda CB 125F
126-650cc Royal Enfield INTERCEPTOR INT 650
651-1000cc Yamaha TENERE 700
Over 1000cc BMW R1250 GS ADVENTURE

Data courtesy of the MCIA

The used car retail market is showing similar recovery behaviour to the wholesale market. The key measures – Average Sale Price and Days-to-Sell are both positive. Just like the auction market, their rate of recovery is slowing, suggesting they are approaching their natural level.

Glass’s Live Retail pricing tool reports on the average time a car spends on the forecourt, with lower days to sell indicating higher retail demand. The average for July of 59.1 days is still 30% higher than expected, but in the circumstances is a distinct improvement over June’s average of 81.9 days. If the decreases continue over the coming weeks the value for August will be similar to August 2019.

New motorcycle market

Sales and demand remained buoyant throughout September, although some dealers reported a slow-down towards the end of the month. Concerns remain regarding the economy, especially how additional COVID-19 restrictions will affect the industry moving into 2021. Despite this, given the average riding age of 56, there is optimism that a significant proportion of motorcycle consumers are financially stable enough to support sales momentum moving forward.

What can the industry expect moving forward?

The industry has already demonstrated its resilience with sales and demand exceeding expectations. However, COVID-19 continues to be a major issue. Given this, the outlook for the final quarter of 2020 remains uncertain.  The Glass’s editorial team will continue to monitor all of the market dynamics during the next few months.

Used motorcycle market

With autumn now fully with us, dealers are experiencing a slow-down in enquiries. However, the used market remains remarkably resilient, potentially even more so than new.  With consumers having more time on their hands, saving money not taking holidays and unable to participate in certain hobbies, some dealers hold the view that increased numbers have taken up riding as an alternative, contributing towards recent sales growth.

Top-selling models

For dealers with major cities in their catchment areas, scooters and 125cc machines remain in strong demand, a result of commuters choosing to ride to work as an alternative to public transport. However, demand continues to be largely buoyant across the board, with the adventure and naked segments being particularly strong.  

Stock

Glass’s has received mixed feedback regarding stock availability from dealers. Although there have been improvements, some dealers continue to find locating quality used motorcycle stock a challenge, particularly 125cc machines. Compounding this issue, some riders are choosing to privately sell their old machines rather than part-exchange. However, despite these issues, many larger dealers are currently satisfied with their stock levels.

Sales activity

Sales remained positive into October with no dealers reporting a significant decline. However, with October’s weather becoming more autumnal and the heightened economic uncertainty, many values have been eased back for the November guide, except where trade feedback and evidence from the market place has suggested further adjustment is necessary. Exceptions to this are mopeds, scooters and commuter machines where values have been held.

Used Car Market Update October 2020

Auction Wholesale Market

A degree of stability seems to be returning to the UK used car auction market. Whilst the key measures of First Time Conversion Rate, Percentage of Original Cost New, and Sales Volume Index all dipped slightly in August, they all recovered in September and continue to exceed the figures achieved in the same month last year. Of course, with all the ongoing uncertainty in the world, it is too early to state that we are back to normal, but it is encouraging to see that despite all the challenges the auction market is still performing well.

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

The rapid post-lockdown recovery was, at least in part, driven by a need to re-stock sites and feed pent up retail demand. Virtually every car offered received multiple bids and anything desirable was selling for very strong money. This slowed, and feedback from the market suggests that buyers are becoming a little more selective in what they buy. Desirable retail stock is still selling well at auction, moving quickly and for good money, but the less desirable stock is starting to become harder work. Cars with damage or less appealing specification can struggle to even get a bid, and those that do sell are not achieving the sort of money they would have two to three months ago.

In terms of what is popular, SUVs continue to sell well. Convertible hammer prices are weakening, no doubt due to the change in season, although they are still selling. Despite all the media hype and their apparent popularity in the new market, alternatively fuelled cars continue to challenge vendors in auction channels. This could be because the latest generation vehicles have much longer ranges and quicker charging times than those typically found in the used market, making them appear less desirable and thus perhaps worth less than the vendors may be hoping… Also, the restrictions around leisure activities have meant reduced demand for taxis and minicabs, which have become biased more towards low emission cars in recent years.

Used Retail Market

The used Retail market is also showing signs of stabilising, with the number of sales observations and the average sale price for September being very similar to those in August. The number of observations is still lower than for the same month last year, down just over 10%, but the average sale price is 5.8% higher, even though the average age of the cars sold was 47.5 months, almost 20% higher than the 39.8 months reported for September 2019.

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

Glass’s live retail pricing tool GlassNet Radar also shows that the average time a car spends on the forecourt continues to decrease. At 37.7 days it is 8.1% lower than the 41.0 days reported for the same month last year, and a notable 17% improvement over August’s 45.5 days. This is a good indication that there continues to be a healthy retail demand for used cars.

Used car market average days to sell October 2020

Outlook

Taken at face value, the metrics for both the wholesale and retail markets suggest that October will be another promising month. However, we continue to live in uncertain times and the recent lockdown announcements may likely slow down the recovery, especially in those regions that are seeing more stringent conditions. More transactions are now carried out remotely though, not just for the wholesale market but also for retail, and this may lessen that impact. We are also heading into the final few months of the year which traditionally means a slowing down of the market, especially if we have “proper” winter weather. So, as we head into the final quarter of what has been an extraordinary year the only thing we can be certain of is that the used car markets – both wholesale and retail – are as unpredictable as they have been for most of this year. Of course, Glass’s Editorial team will continue to monitor activity and share what they find.

New Car Market Update November 2020

New car registrations in September 2020 had a relatively low bar to clear to show growth over the last couple of years. In 2018, registrations were down by 20.5% on prior year due to regulatory changes surrounding WLTP emissions testing. This led to delayed vehicle certification and caused supply issues leading to registration delays. In September 2019 the market increased a paltry 1.3%, with the introduction of the RDE-2 emissions standard blamed for causing similar issues.

Despite the attraction of the new ‘70’ plate and many strong manufacturer retail and business offers, the data released by the Society of Motor Manufacturers and Traders (SMMT) for September show new car registrations falling by 4.4% compared to last year with a total of 328,041 cars registered. Although a lack of stock and logistics issues may have played a part, this is the lowest September registrations total since the introduction of twice-yearly plate changes in September 2001.

Illustrated in the chart below, the year-to-date total for the year is now down a third versus last year, equating to over 600,000 lost sales.

New car total registrations YTD graph October 2020

Data courtesy of SMMT

As in previous months, Private sales showed greater resilience than the sales in the Fleet and Business sale channels with a small drop of 1.1%. This shows that consumer confidence remains reasonably positive, despite the potential for job losses, whilst the reducing support for companies in the Government job retention scheme is just another impact for Fleets and Businesses as the market comes to terms with the pandemic.

Fleet sales reduced by 5.8% compared to last year to 159,081, while business dropped 31.9%, albeit on very small numbers to just 7,597, as both continue to underperform.

New car market Sales channel split YTD October 2020

Data courtesy of SMMT

This decline is understandable as companies continue to struggle with revenue and profit forecasts making large expenditure commitments such as vehicle fleet renewals a lower priority. This comes at a time when coronavirus cases are growing daily in the UK and Europe whilst the Government continues to increase lockdown measures. In the longer term, the increases in cases and lockdown measures will also affect private sales potentially stalling the economic recovery. Add to this the increasing headwind of Brexit and the outlook remains uncertain.

Battery electric and plug-in hybrid registration grew significantly in September accounting for over 10% of registrations, as new models became available increasing consumer choice. Demand for battery electric vehicles (BEVs) increased by 184.3% compared with September last year and have increased 165.4% year to date.

Sustained recovery across the automotive industry to will require a Brexit solution with minimal tariffs and as close to frictionless trade as possible. Additionally, to meet the Road to Zero aspirations the Government will need to consider increases to incentives and infrastructure support for alternative fuel vehicles to help meet the aggressive targets, whilst giving consumers and businesses the confidence to switch from old engine technologies.

LCV Marketplace Update October 2020

New Light Commercial Vehicle (LCV) Market

The light commercial vehicle (LCV) sector is proving resilient in these challenging times, however, there is still much to contend with as we move into the last quarter of 2020. From new social distancing measures, redundancies, the end of the furlough scheme and of course Brexit, all will have an effect on the LCV market and the wider economy. The new plate month of September is typically a strong month, this year returning an encouraging 26.4% growth in demand for LCVs. Overall, 52,096 new LCVs hit UK roads during the month, as all sectors bar-one returned increases in registrations. With the coronavirus lockdown easing and businesses back to work, it is encouraging to record a 7.1% growth in the new light commercial vehicle market. This follows four months of double-digit decline. Overall, 27,701 new LCVs were registered during the month, with growth in all but the Vans under 2.0-tonnes sector.

LCV new registrations graph October 2020

The first three quarters of 2020 have seen year-to-date registrations decline by 27.4%, with 208,080 units hitting UK roads (286,616 units – 2019). Breaking the month down by sectors reveals that registrations for pickups, vans between 2.0-2.5 tonnes and vans between 2.5-3.5 tonnes increased by 10.9%, 11.6% and 40.9% respectively. A 2.5% decline for vans under 2.0 tonnes was the only disappointment. It is important to note that these increases are set against a backdrop of a weak September 2019 driven by the introduction of WLTP for LCVs, with September 2020 registrations still 3.3% down on 2018.

Top five LCV registrations

Top 5 LCV registrations table October 2020

For quarter three 2020, the current SMMT LCV registration forecast is down 26.3% to 269,000 units. With the final forecast for 2020 due at the end of October, it is, unfortunately, unlikely to show any improvement over the current forecast.

As we move into October, UK registrations remain nearly 30% down on the same point last year. The pandemic continues to affect many businesses with the stop-start nature of localised lockdowns affecting many towns and cities around the UK. Although September was a positive step in the right direction, it will remain a tall order to meet the current SMMT forecast.

The interconnected nature of the UK economy means that the unknown nature of Brexit and the end of the furlough scheme will bring further uncertainty in the coming months. Moving forward, operators are starting to look more seriously at more environmentally friendly technologies to meet fleet requirements. This will be critical in the crucial role light commercial vehicles play in the UK economy.

September Used Light Commercial Vehicle (LCV) Overview

The used LCV market continued to deliver outstanding performance during September, with weakness seen only in the minibus sector due to passenger movement restrictions.

Stock shortages driven partly by fewer de-fleets, economic uncertainty and increased demand for used LCVs was the catalyst for the strong month, along with uncertainty over future vehicle supplies. Pent up demand and the volatile world that we currently live in, means that prices are likely to remain high for some time to come.

There seems to be no better time to sell an LCV, with dealers enjoying a buoyant retail market and healthy profits as a result. Rental demand is also high supporting increased home deliveries, with some vehicles earmarked for auction, actually being re-fleeted to meet demand. This trend is likely to increase in the run-up to Christmas.

September in detail

Glass’s auction data results show the overall number of LCV sales in September was up 15.9% versus August 2020 and up a staggering 57.4% versus September 2019. First-time conversions were down slightly at 87.4% compared to 88.0% in August, but up 9.0% versus September last year.

There is a continued appetite for good quality stock requiring the minimum of retail preparation across all ages. Supporting this enthusiasm is the continued high number of online buyers reported by the auction houses. Since March this year, average sales prices have risen over 30%, with September alone recording an 8.3% increase versus August and a 31.2% increase on the same point last year. September prices were at the highest level for the last twelve months.

The average age of sold stock dropped from 72.4 months in August to 69.7 months in September. This figure was 0.9 months higher than the same point last year.

Average mileage for sold vehicles dropped from 73,634 miles in August to 70,457 miles in September. This is the lowest average mileage recorded in the last twelve months and over 10,000 miles less than at the same point last year.

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

The Van’s Headlights: Mitsubishi Shogun Barbarian

The Van’s Headlights

Our research data for the summer months normally shows a lull in used vehicle activity followed by a flood of activity and increased sales in September. However, the pandemic has seen demand and prices soar through the summer. Closure of manufacturing plants and the effects on the wider economy resulting in delayed fleet replacement cycles used stock shortages and uncertainty over future supply. This has led to a surge in demand for used light commercial vehicles (LCVs) and correspondingly huge increases in conversion rates and average selling prices over the last few months.

In this month’s edition of The Van’s Headlights, the team consider the merits of the Mitsubishi Shogun Barbarian 3.2DI-DC 187bhp Auto Euro 6 SWB Commercial (2015 – 2019).

The Mitsubishi Shogun

The roots of the Mitsubishi Shogun (also known as Pajero and Montero in other markets) can be traced back to 1934, when Mitsubishi’s first 4WD vehicle, the PX33 prototype was built. However, it wasn’t until November 1979 that the Shogun prototype was revealed at the Tokyo Motor Show.

The Mitsubishi Shogun launched as a multi-purpose vehicle in 1982. A completely new genre of 4WD combining off-road toughness and capability with the comfort, handling and specification of a saloon.  Short wheelbase (SWB) and long-wheelbase (LWB) models were available with either 2.6-litre petrol or a 2.5-litre diesel turbo engine. 

Further generations of the Shogun passenger vehicles appeared in 1991 and 1999, but it wasn’t until 2004 that the first commercial variants of the Shogun were introduced in the UK.

Designed with the same reputation for reliability and build quality, the Shogun commercial was available as SWB and LWB vans with two trim levels, Equippe and Classic. With both manual and automatic transmissions available with both featuring the much revered Super Select four-wheel-drive system. The choice of four different driving modes; 2H (2WD high range), 4H (4WD high range), 4HLc (4WD high range with locked centre differential) and 4LLc (4WD low range with locked centre differential) made the Shogun Commercial an ideal choice for those needing to take to rougher terrain.

The 3.2DI-DC 158bhp double overhead camshaft (DOHC) engine was introduced in 2007 improving power, torque and driver comfort.

In 2010, Mitsubishi introduced a Euro 5 compliant 3.2DI-DC DOHC engine, again mated to either a manual or automatic transmission, but this time generating 197bhp with an increase in torque. It was at this time Mitsubishi introduced higher specification Warrior and Barbarian trim levels on the SWB 4×4 van.

A facelift in 2015 saw the introduction of an improved monocoque body with a revised grille for the Shogun Commercial, together with a Euro 6 3.2DI-DC automatic engine generating 187bhp with Mitsubishi discontinuing the manual gearbox in favour of an all-automatic line-up. At the same time, revised suspension improved ride and handling whilst LED lighting improved night time vision. A new spare wheel carrier on the tailgate also featured in this facelift.

The SG2 4Work replaced the Equippe as the entry model and was available as a SWB or LWB model, whilst the halo Warrior and Barbarian trims remained available in SWB formats only. SWB models could tow a maximum of 3.0 tonnes and the LWB SG2, 3.5 tonnes.

A capable all-rounder

Andy Picton, Glass’s Chief Commercial Vehicle Editor recommends the Mitsubishi Shogun Commercial as “an extremely capable and rugged off-road van with great towing capabilities. The Shogun is recognised as a credible alternative to the Land Rover Discovery and is a popular choice with the police and the Highways Agency, as well as in construction and agricultural markets”

Andy added, “Although no longer available new, the Shogun is supported by a strong Mitsubishi dealer network. It has a loyal following in the used market, with buyers attracted to its high specification levels, powerful and torquey 3.2DI-DC engine and its ability to tow up to 3.5 tonnes”.

Peugeot Bipper Professional 1.3HDi 80bhp Euro 6 van (2016 – 2017)

The Mitsubishi Shogun Commercial range

  • Two body styles
  • 5-speed automatic gearbox
  • Three trim levels
  • Euro 6 engine line up
  • Up to 3.5-tonnes towing capability

There were three models in the 2015-2018 Shogun Commercial van range – SG2 4Work, Warrior and Barbarian. All models were powered by the same 3.2DI-DC 187bhp Euro 6 engine, with automatic transmission. A high level of standard specification taken from the car featured in the commercial variant and included, Mitsubishi Active Stability and Traction Control (M-ASTC), ABS brakes with electronic brake-force distribution (EBD), driver and passenger airbags, 18” alloy wheels, heated seats, heated and electric wing mirrors, Bluetooth with music streaming, auto lights and wipers, cruise control and a leather-covered steering wheel.

Additionally, the recommended 2018 Shogun Barbarian SWB Auto added as standard; climate control, black leather heated seats, 20” alloy wheels, Touchscreen DAB radio with MP3 player and USB port, satellite navigation system, reversing camera, steering wheel controls, front fog lights, tyre pressure monitoring system, tailgate privacy glass, alarm and exterior chrome detailing.

Shogun SWB DimensionsShogun SWB Load SpaceShogun SWB Miscellaneous
Length4, 386mmLength840mmGross Vehicle Weight2,665kg
Width1,875mmMax Width1,395mmPayload480kg
Height1,870mmWidth between arches1,395mmWarranty5yrs/62,500m
Wheelbase2,545mmHeight1,105mmService Intervals12,500m
  Volume1.3m3 

2016 Pros2016 Cons
Powerful engine with plenty of torqueThirsty engine
Great off-road capabilitiesDisappointing payload
Good level of standard specificationBattery can fail due to insufficient charge
Responsive and smooth automatic gearboxHigh running costs
Superb Super Select 4WD systemThe single hinged rear door is heavy
 Good all-round visibilityOpening the rear door can be an issue in tight spaces
No AdBlue

Good level of standard safety features
 

Glass’s recommendation

Mitsubishi Shogun Barbarian 3.2DI-DC 187bhp Auto Euro 6 SWB Commercial

Registration Plate: 2018/18

Mileage: 30,000 miles

Glass’s Trade £20,500 Excl VAT

Glass’s Retail £22,800 Excl VAT

Motorcycle Market Update September 2020

Significant year on year increases in motorcycle registrations in July and August are boosting the motorcycle market following the national lockdown. Data published by the Motorcycle Industry Association (MCIA) shows that registrations grew 32% compared to August 2019, with all categories recording an increase. Once again it is the scooter category recording the strongest growth.

Glass’s Leisure Vehicles Editor Paul McDonald said, “After a huge boost in July registrations, further growth was hoped for in August, albeit not quite to the same level.  However, a 32% increase was incredible news. The question today is will this resurgence last in the face of recession and an uncertain UK job market?”

Engine band highest registered models – August 2020

Power Band Model

0-50cc Lexmoto ECHO PLUS 50
51-125cc Honda CB 125F
126-650cc Royal Enfield INTERCEPTOR INT 650
651-1000cc Yamaha TENERE 700
Over 1000cc BMW R1250 GS ADVENTURE

Data courtesy of the MCIA

New market

Sales and demand remained strong throughout August. The main focus continues to be the 125cc and commuter markets, although middle weights and larger machines also did well. However, the main issue is a shortage of new machines, with uncertain factory lead times, and some dealers quoting dates early next year for deliveries of certain models.

What can the industry expect moving forward?

Forecast demand is likely to create challenges for dealers into next year. The Glass’s editorial team will follow the market with interest over the final quarter, as summer turns to autumn and the furlough scheme closes with the inevitability of redundancies. Glass’s view is that while there is a reasonable chance commuter and 125cc sales will remain buoyant for the rest of the year, demand for the higher end of the market could decline more rapidly than typically expected during autumn.

Used Market

Since motorcycle dealers reopened following lockdown, the used market has remained busy with strong sales and enquiries throughout August. However, dealers are starting to experience quieter periods, typical in a ‘normal’ year, with August and September holidays. As increasing numbers of employees return to work they continue to seek alternatives to public transport raising expectations that for the remainder of the year, the commuter market will remain buoyant in the used market too. CBT training centres remain busy, good news for the industry’s future, with the potential of at least some new riders progressing to full licences. With the average rider age now approximately 55, this fresh interest is welcome news.  

Top Selling Models

Scooters and 125cc remain in high demand, driven by the increase in interest from commuters, however, a broad range of machines including higher priced examples continue to enjoy strong demand.

Used Stock

Supply continues to improve due to increased new sales generating more part exchanges. Larger dealers report having a good selection of stock and are satisfied with their stock levels, although it remains challenging sourcing quality scooters and 125cc machines. To supplement part exchanges, most dealers continue to proactively maintain stock levels to match demand.

Sales Activity

Today, the market continues to be buoyant, with autumn approaching and the furlough scheme drawing to a close, the next few months are looking increasingly uncertain. The weather in the first half of September provided excellent riding conditions, growing the chances of an extended sales season. Taking this into account and after some careful consideration, many values have been eased back for the October guide, except where trade feedback and evidence from the market place suggests further adjustments were necessary.  Exceptions to this are mopeds, scooters and commuter machines where values have been held, due to strong demand.

New Car Market Update September 2020

The latest figures released by the Society of Motor Manufacturers and Traders (SMMT) showed that registrations in August declined by 5.8%, suggesting another very disappointing month for the industry. However, delving a little deeper into the data suggests that August 2020 is not quite as bad as first impressions show.

The decrease was only 5,347 units compared to 2019, as August is traditionally the lowest volume month of the year. This equates to less than half a per cent of 2019’s total annual sales. Additionally, August’s total of 87,226 units is, in fact, the fifth-highest August since the start of the revised registration frequency back in 2001.

New car market august registrations by year graph 2020

Data courtesy of SMMT

The August sales reductions in the major European markets of France, Germany and Spain were considerably worse, down 19.8%, 20% and 10.1% respectively, despite government-backed incentives in place to stimulate demand, which customers in the UK currently do not enjoy.

Through the sales channels, once again private retail sales performed better than fleet/business with only a 1.7% decline (699 units) on last year, which shows some stability in consumer confidence which is vital for the economy as a whole moving forward. Fleet activity was down 5.5% and Business sales channel dropped 57.9% albeit on a very small total.

Analysing the fuel types shows a similar story, with zero and low emission registrations increasing and gaining market share from petrol and especially diesel. Battery electric cars increased by over 77%, achieving 6.4% of the total sales in August and now stand at almost 5% market share year to date, while pure diesel has declined almost 60% this year.

New car market Fuel split YTD graph September 2020

Data courtesy of SMMT

The top ten best sellers list for the month is back to normality with the Fiesta, Focus, Golf and Corsa all in the top five. However, there is additional good news for Ford as the new Ford Puma small crossover came in fourth place.

Fleet was once again a laggard this month compared to private sales. For the industry to get fully back on track it needs businesses to feel confident with a sustained period of economic improvement after the tumultuous first half of the year. At this point, more businesses will feel confident enough to invest in new car lease contracts.

There are some headwinds including uncertainty over Brexit negotiations on the withdrawal and any new trade deal with the EU. Additionally, the impact from Coronavirus flare-ups this autumn and winter may well force yet more delay on large expenditure commitments by businesses. As noted before, September is a critical month for the car industry and will set the tone for the rest of the year.

Used Car Market Update September 2020

Auction Wholesale Market

As expected, the rate of recovery of the used car market in the UK slowed a little in August. The key metrics of First Time Conversion Rate, Percentage of Original Cost New, and Sales observations Index ended the month lower than for July, although all still performed better than in August 2019. This suggests that “normality”, or what passes for that in these strange times, is returning to the market.

First time conversion rate graph September 2020
Used car market % original cost new graph Septmeber 2020

Taken at face value, the month-on-month reductions may be thought of as a bad thing. However, as with most statistics, it is important to consider a longer-term view. Although auctions remain only online, sale volumes are higher than at the same time last year and the decline from July is minor. There is a degree of “catch up”, but as the whole market was frozen during the lockdown, there is not a particularly large build-up of unsold stock with vendors.

Cars may not have been selling during the lockdown, but at the same time, they were also not being de-fleeted or part-exchanged. The high first-time conversion rate suggests that demand is keeping up with supply. This is supported by the average percentage of original cost new showing that buyers are keen to buy and are prepared to pay good money.

Wholesaler buyer demand

Sales of SUVs and convertibles have been noticeably strong since auctions resumed, the latter helped by the excellent summer weather. One area of the market where the Glass’s Editorial team continues to monitor very closely are alternative fuelled cars, especially battery electric vehicles (BEVs) as demand for these continues to fluctuate every month.

Used Retail Market

The Used Retail Market continues to perform well. The number of observed sales has improved slightly over July but is still lagging behind the same period last year. However, like the wholesale market, the average sale price is notably higher than at the same point last year.

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

Glass’s Live Retail pricing tool also shows that the average time a car spends on the forecourt continues to decrease and is at virtually the same level as last year – 45.5 days for August 2020 compared with 42.1 days for August 2019. This measure is a good indicator of the level of used car retail demand and the rate of improvement suggests that September’s value should show further improvement.

Used car market average days to sell graph September 2020

September 2020

Despite the challenges resulting from an online-only wholesale market and socially-distanced retailing, it appears that both the wholesale and retail used car markets have largely recovered, or even improved on pre-lockdown levels. Whilst is it tempting to be enthusiastic and positive about their prospects we are still operating in very uncertain times. A second full national lockdown is highly unlikely, although not impossible. However, localised and regional lockdowns are already in use and will continue through to the end of the year, and probably into 2021.

However, there is no harm in a bit of cautious optimism. September brings the new 70-plate and September’s new car registrations may exceed those of March; another example of the way 2020 has been turned upside down by COVID 19. New car registrations generate used car activity. This means that through September, especially the latter part, there are likely to be improvements in the key metrics for both the wholesale and retail markets.

LCV Marketplace Update September 2020

New Light Commercial Vehicle (LCV) Market

The light commercial vehicle (LCV) sector continues to navigate a period of instability, remaining sensitive to economic changes. The typically quiet month of August returned a disappointing 16.1% decline in demand for new LCVs. Overall, only 19,407 new LCVs hit UK roads during the month, as all sectors returned declines in registrations.

Performance year-to-date has declined 38.6%, with 136,577 units registered during the first seven months of 2020. Although July was an improvement on the same month last year, the initial pent up demand is likely only to mask a fragile market. Breaking the month down by sectors reveals that registrations increased 24.9% for Pickups, 12.0% for Vans between 2.0-2.5 tonnes and 5.4% for Vans between 2.5-3.5 tonnes, whilst Vans under 2.0 tonnes declined 22.0%.

Top five LCV registrations

The latest July SMMT new LCV registrations reforecast for 2020 is down 26.3% to 269,000 units for the year. Lockdown has placed all businesses under great financial pressure, with underlying weakness in the market.

Although there is a gradual improvement in demand, the UK is still a long way off normal. The pandemic has affected many businesses and a second wave of localised lockdowns has not helped.

The interconnected nature of the UK economy means that there is likely to be more uncertainty ahead as the UK grapples with a reduced appetite and business nervousness and the possibility of further regional lockdowns. Moving forward, fleet renewals will be critical to a successful restart and the UKs long-term green recovery given the crucial role light commercial vehicles play.

July Used Light Commercial Vehicle (LCV) Overview

With auction houses now at near full operational capacity, the used LCV market continues to deliver outstanding performance. Supply shortages and increased demand are keeping prices high at present however, there is a growing caution against the risk of weakening retail demand linked to a possible second spike in COVID-19 and further lockdowns.

Glass’s auction data suggests the number of sales in July were up 14.0% versus July 2019, with first-time conversions increasing for the fourth month in a row.

There is a growing appetite from trade buyers to purchase good quality stock. Sales of Euro 6 light commercial vehicles increased to just under 50% of the overall total in July, with the number of different online buyers increasing as well. Supporting this enthusiasm is data confirming average prices across all ages and sectors have risen 39.0% versus July last year.

July in detail

The average age of sold stock in July rose from 64.8 months in June to 69.5 months. This figure was 3.4 months lower than the same point last year.

Average first-time conversion rates stand at an extraordinary 92.3%, up from 86.5% in June and up from 76.7% 12 months ago.

Average mileage for sold vehicles stands at 71,878 miles, an increase of 2,226 miles on June but nearly 8,500 miles less than July 2019.

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

The Van’s Headlights: Peugeot Bipper

The Van’s Headlights

With conversion rates and average selling prices reaching new heights, the used light commercial vehicle (LCV) market is currently in fine fettle. A shortage of stock and a reduction in rental de-fleet volumes are driving these records. Interestingly, nearly 50% of all auctions sales are now for Euro 6 stock. In this month’s edition of The Van’s Headlights, we consider the merits of Peugeot Bipper Professional 1.3HDi 80bhp Euro 6 van (2016 – 2017).

The Glass’s Commercial Vehicle Editorial Team continue to scour the market in search of models offering the highest levels of versatility and durability whilst adding their experience to spot the best value for money available.

The Peugeot Bipper

Revealed in October 2007 and launched the following June, the Bipper is the smallest van in Peugeot’s LCV line up, underneath the Partner, Expert and Boxer. It was specifically designed as a high cube van with a generous load volume and a payload comparable to the larger Partner van.

Built as part of a joint venture with the Citroen Nemo and the Fiat Fiorino at Fiat’s factory in Bursa, Turkey, the Bipper is designed for urban deliveries. Featuring a wrap-around bumper protecting setback headlights, bonnet and radiator. Additionally, the wheels were pushed into each corner, delivering compact dimensions and maximising interior space.

Peugeot Bipper van side view

Available with a choice of either a 1.4-litre 75bhp petrol engine or a 1.4HDi 70bhp diesel engine emitting only 119g/km of CO2. The HDi diesel engine was also available with an optional electronically controlled manual gearbox, a first for a Peugeot light commercial vehicle.

The Bipper launched with S and S+ trim levels and along with the Nemo and Fiorino was voted joint ‘International Van of the Year’ 2009. An optional five-speed electronically controlled 2 Tronic manual gearbox was introduced in August. Based on the standard manual gearbox, the 2 Tronic delivered improved CO2 of 116g/km and 64.2mpg. The top of the range Professional variant was added to the range during the summer of 2009.

Standard equipment on the S+ included one-touch electric front windows, electric adjustable and heated door mirrors, remote control central locking with separate cab and load area locking, deadlocks and automatic drive-away door locking. In addition to the S+ specification, the Professional specification included air-conditioning, Bluetooth, a half-height bulkhead & grille or full steel bulkhead and 14-inch wheel-trims.

The Bipper S+ changed its name late in 2009 to the SE with a slightly improved level of specification.

Options included a Comfort Pack featuring driver’s seat height adjustment, lumbar support and armrest, reach and rake adjustable steering and integrated clipboard. The Tough Pack added 15” wheels and 185/65 R15 tyres, door sill protectors and mouldings, washable cabin floor covering, raised suspension, front and rear mudflaps and an under-engine protection tray (not available on 2 Tronic).

Servicing is required every 20,000 miles or two years, regardless of engine type. To reduce costs and downtime further, the oil change and air filter, diesel filter, pollen filter and brake pad replacements were all scheduled to coincide with the service interval. The timing belt replacements are due every 140,000 miles or 10 years on the diesel engine, and 90,000 miles or 10 years on the petrol version.

In August 2010, PSA decided to extend the current 60,000-mile warranty to 100,000 miles.

In April 2016, the Fiat Fiorino received a facelift incorporating a new front bumper, a new steering wheel and infotainment system in the cabin. New Euro 6 compliant engines were also introduced at this time. Although both PSA vehicles received the new Euro 6 engine, the Bipper and Nemo did not receive a facelift and were dropped from their light commercial vehicle line-up late in 2017.

A practical choice

Andy Picton, Glass’s Chief Commercial Vehicle Editor recommends the Peugeot Bipper as “a practical and economical van ideally suited to light urban deliveries”

Andy added, “Although no longer available new, the Bipper is a popular van in the used market. Its diminutive footprint belies a van that can accommodate a standard Euro pallet, offer a payload on a par with bigger vans and still returns over 60mpg. Ideal for urban courier work, the Bipper is supported by a strong Peugeot dealer network”.

Peugeot Bipper Professional 1.3HDi 80bhp Euro 6 van (2016 – 2017)

The Peugeot Bipper range

  • One body style
  • 5-speed manual gearbox
  • Three trim levels
  • Euro 6 engine line up
  • 660kg payload
  • Combined 64.2MPG/CO2 emissions – 115g/km
  • Variety of options
  • Available in a choice of six exterior colours – three solid and three metallic

Five models made up the Bipper van range – S, S ATV (All-Terrain Vehicle), SE, Professional and Professional ATV. All models were powered by the same 1.3HDi 80bhp Euro 6 engine, with standard specification including ABS and ESP, Driver’s ladder frame protector, radio/CD player, 12v plug, 6 tie-down load area hooks, 15” steel wheels and twin rear asymmetrical doors.

Additionally, the recommended 2016 Bipper Professional added as standard; air conditioning, side loading door, half-height bulkhead with mesh grille, TomTom GO 5000 Semi-integrated Navigation system, ‘Blue & Me’ handsfree Bluetooth phone kit, driver’s seat height adjustment and lumbar support, driver’s seat armrest, electrically adjustable heated door mirrors, reach and rake adjustable steering wheel and integrated A5 sized clipboard.

Bipper DimensionsBipper Load SpaceBipper Miscellaneous
Length3,864mmLength1,523mmGross Vehicle Weight1,750kg
Width2,019mmMax Width1,473mmPayload660kg
Height1,782mmWidth between arches1,046mmWarranty3yrs/100,000m
Wheelbase2,513mmHeight1,178mmService Intervals20,000m
  Volume2.5m3 

2016 Pros2016 Cons
Economical diesel enginesFront Suspension bearings can fail
Large cargo areaOlder engines prone to faulty connecting rod bearings
Agile city vanBattery can fail due to insufficient charge
Low running costsStandard safety kit is basic – ABS and driver’s airbag
 Diesel engine has to work hard on motorway trips
 Noticeable body roll on bends  
 

Glass’s recommendation

Peugeot Bipper Professional 1.3HDi 80bhp Euro 6 van

Registration Plate: 2016/16

Mileage: 53,000 miles

Glass’s Trade £2,950 Excl VAT

Glass’s Retail £4,075 Excl VAT

A Look At The Renault Megane

At the Frankfurt Motor Show in September 1995, Renault unveiled the Megane, the successor to the Renault 19.  The Megane was Renault’s first model to reflect their new focus on safety. It featured a pillar mounted three-point seatbelt for the rear middle seat replacing the lap strap, and a year later passenger airbags became standard. A far cry from the safety features we enjoy today, but a real step forward versus contemporary competitors.

Over four generations, the Megane has been on UK roads since 1996. It has proved a diverse model range having been available as a three and five-door hatchback, saloon, coupe, convertible, estate and MPV at various points in its lifecycle.

Unveiled as a replacement to the Renault 19, it was in effect essentially only a reskin, using modified chassis, engines and transmissions from the 19.

In the spring of 1999, Renault launched a mild facelift with a modified grille, improvements to safety features and upgraded equipment whilst introducing 16 valve petrol engines. An estate body style also joined the model range.

By September 2002 Renault launched Megane II. As adventurous as its predecessor was staid, the Megane II range created demand for Megane when many buyers would never have considered the ageing and frumpy original. Spawning a huge number of variants. Aside from the original three and five-door hatches, there was a compact estate, a saloon and the sleek Coupe Cabriolet as well as the Scenic and Grand Scenic variants.

This second-generation voted as ‘European Car of the Year’ in 2003, became the first vehicle in its class to receive a five-star EuroNCAP rating. The body styling was based on Renault’s new design language premiered on the Avant Time and immortalised in the 2003 ‘shaking that ass’ advertising campaign. Compared to the first generation, this version benefitted from a raft of innovative technologies, including a keyless ignition system. January 2006 saw the second generation facelift, with changes to the interior, enhanced specifications levels and a remodelled nose.

In October 2008 the Megane III launched in 5 door hatchback and coupe body styles to subdued UK reviews. Although the two models benefitted from differing designs with the coupe having a sportier stance and the hatchback reflecting a more conservative design, the overall bland styling limited the appeal of Megane III in the UK.

Mid-2009 saw the estate version, the sports tourer launch, the following summer the coupe cabriolet version was added to the range. 2012 saw its first facelift which included three new engines, one petrol and two diesels. In 2014 the final facelift for the third generation vehicle included more powerful engines while the hatchback, coupe and estate variants got styling upgrades to match Renault’s new styling.

At the Frankfurt motor show in September 2015, Renault unveiled the fourth-generation Megane which went on sale the following July. Based on the same platform as the larger Espace and Talisman – big Renaults we don’t get in the UK – it benefits from their technology and much of their style. A significant leap forward from Megane III. It is larger and lower than the predecessor and only available as five-door hatchbacks and estate versions.

Over the years, the Megane has proved to be a popular and practical choice, offering a mix of style and space, together with value for money, particularly in the used car market. The following chart shows the average Glass’s residual value for a three-year-old Megane compared to the average for the C segment, containing models such as the Volkswagen Golf, Ford Focus and Vauxhall Astra. It is clear, in this segment, that petrol models consistently hold more residual value and that in general, Megane values track marginally below the segment average, adding to their appeal in the used car market.

Average RV% Renault Megane vc C-Segment graph

Away from the volume derivatives in the C-Segment, since 2004 Renault has marketed the Renault Megane RS (Renault Sport), a series of high-performance hatchback models based on the Renault Megane. The Megane RS has won many awards such as “Best hot hatch” from What Car? (2010–2014), “Highest placed non-supercar” in Evo’s annual Car of the Year test 2011 and “Best hot hatch” from Top Gear.

Creating a halo for the Megane brand, in the same manner as the Golf GTi for Volkswagen, the Megane RS delivers excitement where the standard range has traditionally missed. Now in the third incarnation, based on Megane IV the newest Megane RS is only available in 5-door hatchback body style and was developed with the assistance of Renault F1 Team driver Nico Hulkenberg.

The Automatic Choice

The rise of automatic gearbox.

Ever since the first horseless carriages, engineers have tempted customers into vehicles where there were fewer pedals. The trend started in the USA and spread across the Atlantic with Europeans finding new and smoother ways of delivering automatic transmissions. These transmissions were once the preserve of premium and luxury motor cars, but have since been associated with vehicles in all segments including vans, buses and of course cars.

UK market penetration

From a market penetration perspective, in the UK by the year 2000, the new car registration ratio of manual transmission cars compared to automatics was around 86% manual to 14% automatic. From 2000 to 2010, a small shift occurred with manuals decreasing to 82% whilst automatics increased to 18%.

Driving the demand increases was the mating of automatic gearboxes with low revving, high torque diesel engines with excellent fuel economy. This was the ideal combination for an automatic gearbox. Unfortunately, few manufactures were able to capitalise on this increased demand, as automatic gearboxes struggled with reliability under such high torque loads.

Cog increases

By 2010, most manufacturers were producing reliable automatic gearboxes. The game-changing factor was the ability to increase the number of gears within the gearbox immediately improving fuel economy. The additional gears gave these new gearboxes increased flexibility for cruising at high speed in very high gears whilst still being able to crawl around town at low speed in low gears.

Like most technological advances user perceptions takes longer to change. Gradually the switch from manual transmission to automatic, in its many different versions, has accelerated. By the end of 2019, increased market penetration had driven registration of automatic cars to 36% up from 17% in 2009. In terms of registrations, this is a rise from just 335,314 in 2009 to 827,676 in 2019. Registration figures for the first half of 2020 show that the percentage of automatics sold is up another three percentage points compared to 2019, albeit the overall registrations for 2020 is artificially low due to Covid-19. However, the upward trend for automatics is very clear.

The release from the premium segments of paddle and button gear changers linked to automatic gearboxes gave a sporty image improvement to automatics moving them away from pipes and slippers to new younger audiences. This new desirable image has gone a long way to shift automatic gearbox perception long associated with poor economy and lacklustre performance.

New registrations by gearbox graph

Wholesale changes

In the auction market, data shows increasing volumes for both manual and automatic gearboxes from 2010 until 2019 when manual gearbox penetration starts to decline whilst automatic gearboxes continue to increase. Wholesale volume of automatic gearboxes in 2010 stood at 119,625 cars increasing to 368,772 cars in 2019.

Auction sale by automatic gearbox graph

The automatic choice

New car registration data shows demand for automatic gearboxes is continuing to rise with 39% of all cars registered so far this year (2020) being equipped as an automatic. It is likely, that within the next few years half of all vehicles registered will be automatics. This is partly driven by an ageing UK population and in parallel partly due to the benefits that have transformed automatic gearboxes. Combine this with ever slower and queuing traffic; the automatic gearbox has become an automatic choice.

Used-car transactions grow across Europe in July

The latest data from the respective associations in the major continental European markets reveal that the volume of used-car transactions grew in July 2020 compared to the same month last year. Autovista Group senior data journalist Neil King considers this return to growth across Europe’s used-car markets as the sector tentatively recovers from the coronavirus (COVID-19) crisis.

Used-car sales increased by 13% year-on-year in both France and Germany in July, and were up 9% in Italy and 6% in Spain. Through to July, Germany is the only major European used-car market that has not suffered a double-digit decline, with a comparatively modest contraction of 8%.

Used-car data is not yet available for the UK for July but is expected to follow the growth trend, especially given the 11% surge in new-car registrations in the country’s first full month of trading since February. This is even without increased buying incentives, which have been introduced in France, Germany, Italy and Spain.

Used-car transactions, year-on-year percentage change, July and year-to-date 2020

Used-car transactions, y-o-y percentage change graph, July and year-to-date 2020
Sources: CCFA, KBA, ANFIA, GANVAM/IEA

Outperforming new-car registrations

Prior to the positive results last month, the volume of used-car transactions declined in the first half of 2020 compared to H1 2019 in all five major European markets. However, the downturns in the first half of 2020 were not as dramatic as the contractions in new-car registrations.

Used-car transactions and new-car registrations, year-on-year percentage change, H1 2020

Used-car transactions and new-car registrations, y-o-y percentage change graph, H1 2020
Sources: CCFA, KBA, ANFIA, ANFAC, GANVAM/IEA, SMMT

In the UK, the used-car market contracted by 28.7% in the first half of 2020, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT) on 11 August. Following a comparatively modest decline of 8.3% in the first quarter of 2020 as the COVID-19 lockdown from March negated growth in January and February, there were only 1,039,303 changes of ownership in the second quarter, equating to a 48.9% slump in the second quarter. However, ‘the pace of decline eased as the quarter progressed, from a peak year-on-year loss of 74.2% in April to 17.5% in June, as private sellers and buyers got back on the move and transactions began to restart,’ the SMMT stated.

‘As devastating as these figures are, with full lockdown measures in place for the whole of April and May, they are not surprising. As the UK starts to get back on the move again and dealerships continue to re-open, we expect to see more activity return to the market, particularly as many people see cars as a safe and reliable way to travel during the pandemic. However, if we’re to re-energise sales and the fleet renewal needed to drive environmental gains, support will be needed for the broader economy in order to bolster business and consumer confidence,’ commented Mike Hawes, SMMT chief executive.

Continental transactions

There were similar contractions of the used-car market in Spain and Italy. Spain suffered the most, with 31.7% fewer changes of ownership in the first half of 2020 than a year earlier, but new-car registrations declined by more than 50%. There was a phased approach to relaxing the lockdown measures in Spain, which largely explains why both the new- and used-car markets were still weak, even in June. However, dealers can now fully reopen, and the introduction of the MOVES II incentive scheme for new battery-electric vehicles (BEVs) and plug-in electric hybrids (PHEVs) and the RENOVE scrappage scheme have stimulated the Spanish market since their introduction in early July.

Used-car demand fell 31.6% year-on-year in Italy in the first half of 2020, compared to a 46.1% contraction of the new-car market. However, many buyers of both new and used cars decided to hold off until government incentives came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). This new scheme comes on top of the Ecobonus scheme, which incentivises cars producing less than 20g of CO2/km.

Electric and hybrid cars can now benefit from up to €10,000 in subsidies when scrapping an older vehicle. €3,500 is now provided for scrapping vehicles that are at least 10 years old when buying a new Euro 6 vehicle with CO2 emissions up to 110g/km, and a price of up to €40,000. Dealers will put forward €2,000 towards the incentive, while the state provides €1,500. Without trading in an older model, the funds drop to €1,750.

In France, the 17.4% decline in used-car sales in the first half of 2020 was a significantly better performance than the 38.6% fall in new-car registrations. Whereas the incentives introduced on 1 June for new BEVs and PHEVs remain, the additional bonus for trading in older cars for cleaner new and used cars was exhausted before the end of July. The scrappage scheme reached its 200,000-vehicle cap after just two months, but the Ministry of Ecological Transition announced it would be replacing the recovery scheme with a conversion bonus, applicable from 3 August.

Germany has weathered the COVID-19 storm better than the other major European markets, with only 11.4% fewer changes of ownership in the first half of 2020 compared to the same period last year. New-car registrations have also suffered less than in the other major markets, but were still down 34.5% in the first half, and have therefore been outperformed by used-car demand here too.

Residual-value resilience

As used-car markets have proven more resilient than new-car markets, the impact on residual values (RVs) has been rather marginal in European markets so far this year. Nevertheless, a ‘three-speed’ development of residual values (RVs) is emerging. The UK and France are benefitting from pent-up demand and some markets have had a rapid reaction to the impact of COVID-19, but most are ‘late starters’ with limited value movements thus far.

Residual value inteligence coronavirus tracker July 2020
Source: Autovista Group – Residual Value Intelligence Coronavirus Tracker

As COVID-19 lockdowns are left behind, thoughts turn to economic recovery. However, as the latest update to the Autovista Group whitepaper ‘How will COVID-19 shape used car markets’ explains, in the last month, the situation has taken a gloomier turn. Download your copy here.

Used Car Market Update August 2020

Auction Wholesale Market

The recovery of the UK used car auction market continued through July. The key metrics of first-time conversion rate, sale value and sale volume are returning to track with their pre-lockdown trends. However, the rate of improvement is slowing suggesting that an over-recovery, where the market overshoots and then goes through a period of decline, is becoming less likely.

Used car market first time conversion rate graph August 2020

Sale volumes have recovered to pre-lockdown levels, despite year-to-date new car registrations being down over 40% due to the lockdown. Reduced new car registrations are impacting the volume of part-exchanges generated and the number of contract hire and lease de-fleets.

With the major auction groups continuing to hold only online sales, some buyers continue to be wary about spending substantial amounts of money on vehicles they have seen in person. However, this trust continues to improve as buyers become more accepting of the descriptions provided by the auction houses.

With traditional physical auctions unlikely to return before the end of the year, all buyers are going to have to adjust to the new way of sourcing stock. Whilst there are some challenges around online auctions, there are also advantages – particularly the ability to visit several auctions all over the country in one day rather than spending several hours in the day travelling to one or two physical sites.

Used Retail Market

The used car retail market is showing similar recovery behaviour to the wholesale market. The key measures – Average Sale Price and Days-to-Sell are both positive. Just like the auction market, their rate of recovery is slowing, suggesting they are approaching their natural level.

Used car market average sales price graph August 2020

Glass’s Live Retail pricing tool reports on the average time a car spends on the forecourt, with lower days to sell indicating higher retail demand. The average for July of 59.1 days is still 30% higher than expected, but in the circumstances is a distinct improvement over June’s average of 81.9 days. If the decreases continue over the coming weeks the value for August will be similar to August 2019.

Used car market average days to sell graph August 2020

Next Month

The trends of the key metrics for both the wholesale and retail markets continue to be positive. The rates of improvement are slowing, reducing the spectre of a “boom and bust” recovery and show trading is likely to return to seasonal levels within a few months. September will see the launch of the 70 plate generating more used car volume and activity, although typically the effect of this will not be seen until the latter part of the month.

Overall, registrations in September could exceed those for March, showing how “back to front” this year’s car market has been compared to typical seasonal activity.  The new car market is still catching up, however, Glass’s data suggests that total registrations for 2020 will be around 30% lower than in 2019.

Podcast: Running the numbers on incentives, registrations and residual values

The Autovista Group Daily Brief Team discusses the biggest automotive news stories of the last fortnight. In this episode, Tom Geggus talks incentive schemes, Neil King reviews registration figures and returning special guest Christof Engelskirchen wraps up residual values.

https://soundcloud.com/autovistagroup/running-the-numbers-on-incentives-registrations-and-residual-values

You can also listen and subscribe to receive further episodes direct to your mobile device on Apple, Spotify and Google Podcasts.

Carmakers’ financial performance highlights COVID-19 crisis – Part 2

Daily Brief editor Phil Curry looks at carmakers’ 2020 quarterly and first-half financial performance, exploring how the coronavirus (COVID-19) pandemic has affected the automotive industry. In this second part, Curry explores the impact of COVID-19 on the financial performance of BMW, Daimler and Toyota.

The BMW Group delivered 962,575 BMW, Mini and Rolls-Royce premium-brand vehicles to customers worldwide in the first six months of 2020, down 23% compared to the first half of 2019. Group revenues fell 10.3% to €43.2 billion. Earnings before interest and tax (EBIT) for the six-month period amounted to €709 million, down 74.6%. 

As BMW expected, the negative impact of the COVID-19 pandemic was felt more sharply in the period from April to June. The carmaker reported a loss of €666 million in Q2, its first quarterly loss since 2009.

‘Our swift responsiveness and consistent management strategy enabled us to limit the impact of the corona pandemic on the BMW Group during the first half of the year,’ said Oliver Zipse, BMW chairman. ‘We are now looking ahead to the second six-month period with cautious optimism and continue to target an EBIT margin between 0% and 3% for the automotive segment in 2020. We are monitoring the situation very closely and managing production capacities in line with market developments and regional fluctuations in customer demand.’

Daimler – a challenging quarter

Daimler has issued a number of profit warnings in recent years, as it has struggled with EV development budgets, falling sales and the implementation of the Worldwide Harmonised Light-vehicle Test Procedure (WLTP). The COVID-19 pandemic has therefore added another layer to an already complicated situation.

The German carmaker reported that revenue slipped ‘significantly’ by 29% to €30.2 billion in Q2 2020. It reported a loss before interest and tax of -€1.7 billion, with a net loss of €1.9 billion.

‘Due to the unprecedented COVID-19 pandemic, we had to endure a challenging quarter,’ said Ola Källenius, chairman of Daimler. ‘But our net industrial liquidity is a testament to effective cost control and cash management, which we must continue to enforce. We are now seeing the first signs of a sales recovery – especially at Mercedes-Benz passenger cars, where we are experiencing strong demand for our top end models and our electrified vehicles. Going forward, we are firmly determined to continue to improve the cost base of our company. At the same time, we are committed to our key strategic objectives: to lead in electrification and digitalisation.’

Daimler countered the drop in demand by quickly suspending production in March, April and May, as well as introducing short-time working. To safeguard the company’s financial strength, expenditure and investments were focused on the most critical future projects. The company currently expects to return to profit by the end of the year.

Toyota turns a profit

Unlike Nissan, and other Japanese carmakers, Toyota reported a profit, albeit significantly reduced, in its 2021 financial year Q1 results, covering the period from 1 April to 30 June. The carmaker’s operating profits plunged by 98% compared to the same period last year, coming in at ¥13.9 billion (€110 million).

Net income tumbled 74% to ¥158.8 billion, as total retail vehicle sales, including those from Daihatsu and Hino, fell by 32%.

Toyota attributed its profit to a number of key elements that played out in the three months. First, the effects of foreign exchange rates decreased operating income by ¥75 billion. Secondly, cost-reduction efforts increased operating income by ¥10 billion. Lastly, the effects of marketing activities decreased operating income by ¥810 billion yen, largely due to the fall in sales volume caused by the spread of COVID-19.

The carmaker has not revised its forecasts for the year, which were made in May 2020, as it operates an April to March financial year. Therefore, it was able to take the COVID-19 effect into account when planning its year ahead. The company expects operating income will fall 79% to ¥500 billion in 2020/2021 while net income will slide 64% to ¥730 billion.

‘While we expect an increase in consolidated vehicle sales, we have left those forecasts unchanged given, for example, the possibility that the business environment will change significantly depending on such factors as the future spread of COVID-19 and the state of its containment,’ the company said.

Cautious optimism

Throughout the recent spate of financial results, one thing is clear. No company is currently able to accurately forecast its full-year results. Some have tried, with caveats added in case things change drastically, while others have simply said they are not in a position to produce forecasts in what is a volatile market.

However, there is cautious optimism, and as countries around the world start to get a grip on how to handle the COVID-19 pandemic, it is hoped that the extreme measures taken in March and April will not be repeated. What could cause further issues for the automotive industry is the economic impact, which has pushed some countries into recession and is increasing unemployment. These two factors that do not bode well for the purchase of new vehicles.

Read part one of Curry’s financial results round-up here. 

Carmakers’ financial performance highlights crisis behind COVID-19

Daily Brief editor Phil Curry looks at carmakers’ 2020 quarterly and first-half financial performance, and how the coronavirus (COVID-19) pandemic has affected the automotive industry. In this first part of two, Curry considers VW Group, Nissan, Renault and Ford.

Europe’s economy is in a state of flux in the wake of COVID-19 lockdowns, with Italy leading the way in extreme measures put in place to prevent the spread of the virus.

Some carmakers have weathered the storm better than others, and many remain optimistic that the impact is merely a ‘blip’ in their financial results, with improvements already developing.

VW – one of the most challenging periods

In its H1 2020 results, Volkswagen Group (VW) reported an operating loss of €803 million (before special items). This expanded to an overall loss in the first half of 2020 to almost €1.5 billion when special items are included. Vehicle sales were down 30% compared to the first half of 2019, while production fell 32.5%. Group sales revenue decreased by 23.2% to €96.1 billion.

Frank Witter, member of the group board of management responsible for finance and IT, said: ‘The first half of 2020 was one of the most challenging in the history of our company due to the COVID-19 pandemic. The health of our employees, customers and business partners is still the top priority. With our 100-points plan to ensure maximum health protection, we have, for example, created the best possible prerequisites for a safe working environment. At the same time, we introduced comprehensive measures aimed at reducing costs and securing liquidity early on, which enabled us to limit the impact of the pandemic on our business to a certain degree.

‘Thanks to the great team effort, we have gradually been able to ramp up operations within the Group and up until now, have steadily managed to navigate through this unprecedented crisis. Due to the positive trend exhibited in our business over the past few weeks and the introduction of numerous attractive models, we look cautiously optimistic to the second half of the year.’

Nissan – major losses

For the April to June period, consolidated net revenue at Nissan was ¥1.1742 trillion. The operating loss was ¥153.9 billion, equivalent to an operating margin of -13.1%. The net loss was ¥285.6 billion.

In its first quarter, Nissan’s global automotive sales fell by almost half amid the pandemic. To limit the spread of COVID-19, the company suspended production at manufacturing sites around the world. Nissan’s plants have since resumed operations but face reduced utilisation of their capacity due to lower demand. The company’s performance continues to be impacted by the challenging business climate, it said in a release.

Nissan raised concerns about its financial performance in April, saying that its full-year consolidated earnings ‘may differ by more than 30% from the previous financial forecast’ that was made in February. It is expecting an operating loss of ¥470 billion (€3.7 billion) for the year to March 2021.

Renault – impacted by Nissan

French carmaker Renault Group announced a €7.4 billion net loss in the first half of 2020, with the carmaker highlighting the negative impact of alliance partner Nissan’s results.

The contribution of associated companies came to -€4.8 billion, compared with -€35 million in the first half of 2019. ‘This decline came mostly from Nissan’s contribution, down €4.796 billion including -€4.3 billion of impairments and restructuring costs,’ the carmaker said.

Global sales dropped by 34.9%. However, the company stated it had a ‘high-level order book’ at 30 June, and sales of its Zoe electric model were up by 50%, highlighting the appeal of the technology. It is also likely that the generous incentive scheme in France helped the carmaker to increase sales in the period from 1 June.

No reliable guidance

However, Renault is unsure of how it will perform in the rest of 2020. ‘Given the uncertainties around the health situation, both in Europe and in emerging markets, Groupe Renault estimates that it is not in a position to give a reliable guidance for the full year,’ it stated.

Luca de Meo, CEO of Renault, declared: ‘Although the situation is unprecedented, it is not final. Together with all of the Group’s management teams and employees, we are fully dedicated to correcting the situation through a strict discipline that will go beyond reducing our fixed costs. Preparing for the future also means building our development strategy, and we are actively working on this. I have every confidence in the Group’s ability to recover.’

Ford quarter supported by Argo AI

Ford benefited from an investment made in its autonomous subsidiary Argo AI by VW Group, as part of a collaboration deal on driverless and electric-vehicle technology. Without the investment, Ford reported a loss for the second quarter of -$1.9 billion. Including the investment, the firm reported a second-quarter profit of $1.1 billion, up by $1 billion on the similar period in 2019.

Its H1 results reflect the wider picture of the coronavirus impact with six-month losses. For the first half of 2020, the company reported a loss of $900 million – a negative impact of $2.2 billion compared with the same period in 2019. Global sales fell 37% compared to the first six months of 2019.

Ford directed much of its capabilities and resolve in the second quarter to understanding and helping to meet the coronavirus-related needs of customers, dealers, suppliers, healthcare professionals and first responders, and patients and communities. Initiatives like enhanced and new online services, and deferred financing payments on new vehicles in the US, benefitted customers and Ford as commerce stalled, then began to recover. However, with the US yet to emerge from its first wave of coronavirus infections, let alone face a second wave, Ford’s global business may yet be facing deeper challenges in the second half of 2020.

In a follow-up article to be published tomorrow (14 August), Daily Brief editor Phil Curry explores the impact of COVID-19 on the financial performance of BMW, Daimler and Toyota.