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Traditionally, at this point of the year, the motorcaravan industry would focus on the new season ahead, with dealers and manufacturers preparing for the annual October show at the Birmingham NEC. However, 2020 has been anything but traditional with COVID-19 leading to the cancellation of the show and disruption to the market. Usually demand will have reduced by now as the summer season ends. This is certainly not the case this year, as numerous contacts have told the Glass’s editorial team that the market is behaving unlike any other year.
Dealer feedback
Trading feedback from dealers over the summer months ordinarily tends to show a general consensus regarding market trends, with a varying proportion of dealers viewing things differently. This year however, every dealer that the Glass’s editorial team spoke to held the same viewpoint. Sales have been consistently strong since the physical reopening of showrooms on June 1. Additionally, many dealers have experienced record sales levels indirectly supported by the Government adding additional countries to the 14-day Covid-19 quarantine list.
The strengthening market was extremely welcome after a period of complete shut-down with many dealers believing the market will retain current demand levels for the next twelve months. The continued demand levels are even more likely if the increased demand from first time buyers continues. Dealer feedback suggests that as many as 75% of sales over the summer have been to customers who have not previously owned a motorcaravan, many of whom fall into younger age demographics than traditional motorcaravan owners.
Stock availability
Whilst the incredible demand is of course welcome, it has also caused serious issues with stock availability, which threatens further growth. A lack of both new and used units has been a growing concern since mid-June. Dealers and manufacturers have confirmed that whilst record sales numbers were being recorded, so too were record low volumes of stock. There are even dealers who fear they will completely run out of stock in the coming weeks.
High consumer demand has enabled dealers to sell unsold new units carried over from last year that they had previously struggled to sell, even with heavy discounts. However, prices have been readjusted due to this demand. Used stock advertised prices have also increased, with many dealers referring to these values as ‘COVID prices’ and it remains to be seen how long they will last.
Factory production
Dealers are concerned that there is little sign of new stock on the horizon. The majority of manufacturers have now recommenced production. However, unfortunately this is at reduced production volumes due to the Covid-19 contact protocols that are in place to protect factory workers.
The hindrances to manufacturing lines means that 2021 model year stock will not start arriving with dealers on mass until early next year, leaving them with an extended period without stock replenishment.
Used stock availability
Good quality used stock availability is low at the best of times and is almost non-existent currently. Dealers have reported to Glass’s that the stock being offered to the trade is usually at unrealistic prices, with little profit opportunity. Another factor adding to the shortage of used stock is the lack of part-exchanges generated over the summer. This is due to the increased numbers of first-time buyers entering the market.
The remainder of 2020 is going to be difficult for dealers to continue with such low stock levels. Usually at this point in the year dealers begin to be offered unwanted units from customers, allowing an opportunity to rebuild stock levels, however customers are choosing to hold onto their motorcaravans this year adding to the already dire stock position.
The market
The market appears to be at a pivotal moment. The impact of COVID-19 has resulted in a market with a fresh chance of growth through natural demand. This looked very unlikely leading up to March this year.
At the time of writing, cases of COVID-19 are rising in the UK and Europe again. This could result in fewer overseas holidays in 2021 thereby encouraging more people to staycation. This will boost demand further.
The growing stock crisis will hinder growth, however if dealers can get through a period of business slow down due to the lack of stock, then 2021 could deliver exceptional results.