Manheim sees healthy demand for used vans but warns of stock shortages for cars
- February 10, 2020
- Posted by: John Swift
- Category: Automotive Industry
Dealers are paying slightly more for second-hand vans at auction knowing that strong retail demand will soon move them from the forecourts with a good profit margin.
Auctioneer Manheim says that last month LCVs were selling at an average of around £6,500, some £350 up on December, and four out of five sold the first time around.
Stuart Peak, its LCV specialist, said:
“It’s safe to say that buyer demand hasn’t slowed at all since the start of the year, with our auction halls jam packed with buyers wherever you go. Dealer confidence has risen and when I speak to our buyers they’re telling me that retail demand is excellent, meaning they can go out and spend at auction.”
The van market is strong generally at the moment and franchised retailers have seen two consecutive months of growth now, up 6% in January according to the SMMT. 69-plated small and mid-size vans up to 2.5 tonnes, in particular, saw exceptional growth in January although pick-ups dropped by 10%.
Manheim says the healthy start to the year in LCVs is matched by cars too. It says conversions are around 90% and CAP results are close to 100% although the market is still adjusting after a big drop in CAP prices mid-2019. However, it warns that too many vendors are pushing cars described as CAP clean when they are nowhere near that standard.
Dealers scrapping for cars to sell
Andy Conde, its cars specialist, said:
“The good news is that demand remains as strong as ever. We’re all scrapping for cars to sell and buyers are scrapping for cars to buy. Irrespective of the volume on offer, buyers are willing to travel across the country.”
However, he repeated earlier warnings that a weak new car market will restrict stock supplies later on:
“The majority of our manufacturer vendors are enjoying 100% conversion successes at the moment but have reported there could be shortages of stock by the middle of the year. This will only increase demand for this type of premium stock.
Why the shortage? Well consumer demand for used cars is on the increase and this is having knock-on effects to the delivery of new cars. Dealer part-exchanges are also decreasing with many dealers either selling their ‘swappers’ on their forecourts, or retail buyers are disposing of their old vehicles via a different route prior to buying a new one.
We must make sure we keep a close eye on supply and react accordingly, but for now the market is in a very strong place. Long may it continue.”
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