LCV Marketplace update – May 2020

Andy Picton | 12 Jun 2020

About the author

Andy Picton

Chief Commercial Vehicle Editor

Having worked previously for Barclays Asset Finance and LeasePlan in the commercial vehicle sector, Andy joined Glass’s in 2002 as part of the Commercial Vehicle team working closely with manufacturers, leasing and insurance companies, traders, dealers and auction houses. He was promoted to Chief Commercial Vehicle Editor in 2016 and manages our industry-leading team of valuation experts. He loves football, music and commercial vehicles.

New Light Commercial Vehicle (LCV) Market – May 2020

With the coronavirus lockdown continuing to affect the new light commercial vehicle market, registrations fell heavily again in May. The UK new light commercial vehicle (LCV) market declined by 74.1%. Overall, only 7,541 new LCVs hit UK roads during the month, with the majority used to further support the NHS, emergency, pharmaceutical, food distribution and home delivery services.

LCV new registrations graph May 2020

Performance year-to-date has declined 49.6%, with only 78,835 units registered during the first five months of 2020. Although an improvement on April, this unparalleled crisis has resulted in further significant drops in demand across all sectors. Breaking the month down by sectors reveals registrations fell 80.3% for Pickups, 84.0% for Vans under 2.0 tonnes, 78.7% for Vans between 2.0-2.5 tonnes and 70.4% for Vans between 2.5-3.5 tonnes.

Top LCV registrations May 2020

The latest April SMMT new LCV registrations reforecast for 2020 is down 28% to 263,000 units for the year. Lockdown is affecting everyone from the smallest trader to the biggest fleet, with many struggling to remain in business.

The interconnected nature of the UK economy means that the coronavirus crisis is affecting everyone. For over two months, new and used LCV sales have been on hold, but dealerships and auction houses are slowly starting to reopen with social distancing measures, deep cleaning and appointment bookings as the new norms across the industry.

Restoring confidence in the economy will be critical if operators are to resume some sort of business ‘normality’ moving forward. There has been a slow but gradual increase in fleet renewals of late, but confidence in the economy is critical if they are to continue to reinvest in the cleanest fleets.

May Used Light Commercial Vehicle (LCV) Overview

Auction houses started reopening online sales from the middle of May. With the majority of auction locations stocking vehicles from before the March lockdown, the initial aim was to move this dormant stock as quickly as possible.

Glass’s auction data suggests May sales were down 58% versus May 2019. However, already in June, UK auction buyers are adapting to the online world with sales and first-time conversion rising quickly. As logistics become accessible, more used LCVs will become available in the auction channels increasing supply at a time when buyers have growing confidence in buying at online sales.

As online sales programmes increase, there is a definite appetite from trade buyers to purchase good quality stock. Supporting this appetite is data confirming average prices across all ages and sectors have risen 22.6% versus May last year.

Physical auction sales restarted on the June 15; however, many auctions were in no rush to reopen, with social distancing, safe vehicle movement and deep cleaning of all surfaces a continuing issue.

May in detail

The average age of sold stock in May fell dramatically from 83.0 months in April to 59.9 months. This figure was also 9.6 months lower than the same point last year.

Average first-time conversion rates stand at 54.9%, up from 33.3% in April, but down from 71.7% 12 months ago.

Average vehicle mileage for those that sold stands at 65,758 miles, a decrease of 5,861 miles on April and more than 13,600 miles less than May 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.

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