Figures released by the National Caravan Council (NCC) for the January 2020 show the moving-annual-total for motorhome registrations was up 5%, at 15,362 units.

The Caravan, Camping & Motorhome show at the NEC in February feels like a long time ago. Since then, Covid-19 has been the main focal point for the world and it looks set to grind most industries to a halt. Amongst everything that is happening now, it is easy to forget that in February, there was a refreshing feeling going into the NEC show.

Optimism was in the air, the market was ready to kick on after the cloud of Brexit and political uncertainty that loomed large was starting to vanish. Numerous dealers told Glass’s that January had been a very strong month for them in terms of sales.

The Manchester and Glasgow shows provided encouraging results too. It was logical to link the buoyancy in the market to the evolving political situation. There was hope that improving market confidence could run through into spring and early summer.

The Caravan, Camping & Motorhome Show 2020

Due to a lack of confidence in the market, dealers almost halved their factory orders for 2020, unsurprisingly; manufacturers were keen for a good NEC show. Unfortunately, it was frustrating for many manufacturers and dealers not to see the ‘post-election boom’ carry through into the NEC show, much to everyone’s surprise.

At the NEC show, manufacturers and dealers experienced varying degrees of success, most reporting sales below targets. Dealer comments advocate a lack of ‘buying’ customers attending the show as the underlining reason for the lack of success with the majority of visitors browsing product ranges.

Overall attendance was down by 2,006 visitors compared to 2019. The third year in a row the attendance has dropped coinciding with difficulties faced in the new market.

Taken in isolation, these results would hamper the 2021 season from growing. Manufacturers could easily offload unsold stock into the market with even higher discounts further distorting the market and causing a domino effect on used stock values of all ages.

Motorhome Customers

Motorhome customers are constantly looking for value and how best to invest their budget. This is proving difficult when pricing for the majority of mid-range models is between £60-70k. The result of the continual price increases is that many NEC exhibitors are selling higher numbers of lower priced entry-level vehicles. These sales are usually at lower margins compared to premium-level model ranges.

The Motorhome Market

The Glass’s team receive persistent feedback that cost new prices are already high and annual increases are continuing to deter customers from buying new vehicles. This is a continuing theme within the industry with many stakeholders voicing ongoing concern.

On top of this, there is a growing belief that the market has simply peaked. In 2015 and 2016, the market experienced growth with increasing sales volumes. Over the last two years, sales have been harder to come by, despite high discount levels. The discounting has been essential to help dealers reduce stock levels; however, it is causing significant competition between dealers as they continually undercut each other when setting forecourt prices.

The overproduction of stock also continues to be damaging for the market. Although numbers of unsold 2018 and 2019 stock continue to reduce, there are still units available. There was some hope among dealers carrying unsold stock that VED increases would attract customers to units unaffected by the new regulations, however, so far consumers appear to have ignored this potential cost save.

Vehicle Excise Duty (VED)

New regulations reclassifying motorhomes as cars instead of commercial vehicles for VED purposes came into effect September 1^st 2019. This means the basis for VED rates for motorhomes are CO2 emissions sending the majority of motorhomes straight into the highest VED band causing the VED to increase from £265 to £2,135 for the first year for the most polluting vehicles, an increase of 705%. This does decrease for subsequent years, to £145 per year for vehicles under £40k and to £465 for vehicles above £40k.

Customers currently see all price increases as barriers to entering the motorhome market. The NCC and their members continue to voice concern on how the VED changes are affecting the industry expressing concern directly to the government with a commons briefing paper published September 6^th 2019 showing why these changes would affect the market.

After much hard work, the NCC and their members managed to get the rise in VED reversed through parliament support, wining an immediate U-turn in Rishi Sunak’s first Budget.

Motorhome used market

Feedback we have received suggests the used market continues to be buoyant with an increase in transactions reported by dealers. Values remain strong, despite heavy discounting of new stock with prices laddering down into older model’s values. From a demand perspective, dealers continue to inform Glass’s that there are no trends in terms of specific vehicle layouts or models.

For quick stock turning, the key for dealers in the used market is to source quality units for competitive prices with minimal faults. This reflects the current lack of available used stock sources for dealers.

Motorhome: challenges ahead

Even before the arrival of Covid-19 the new motorhome market had sales challenges forecast for the season. The pandemic will also be unwelcome to the used market, a market usually only slowed down by a lack of quality stock availability. The forced closure of businesses across the UK will severely disrupt this market. Sales will halt, adding concern when so much new stock remains unsold.

There could be an argument that holidaymakers will want stay at home this summer. However, with the uncertainty of travel restrictions, even in the UK, today the summer holidays seem a distant dream. With the pandemic not only slowing retail demand, but also potentially affecting customer purchase power, the mid-term future for this market remains uncertain.