June means more growth and supply for UK LCV markets

14 July 2023

lcv

The UK’s new light-commercial vehicle (LCV) market saw continued growth in June, while there was an increasing supply of used models. Andy Picton, chief commercial vehicle editor at Glass’s (part of Autovista Group), analyses the latest numbers.

The UK’s new LCV market grew by 31% in June, rounding off six consecutive months of growth. The 34,630 registrations give a year-to-date total of 169,926 units, a 17.7% increase on the same point 12 months ago.

All segments except vans under two tonnes showed an improvement, and pickups recorded a 40.8% increase. Meanwhile, vans weighing 2-2.5 tonnes gross vehicle weight (GVW) and vans between 2.5 and 3.5 tonnes GVW, saw respective year-on-year growth of 160.8% and 15.6%. With 23,640 units, the latter accounted for 68.3% of the market. Registrations of vans under two tonnes GVW fell by 42.8% as operators opted for larger and more cost-efficient models.

Ford domination

In the first six months of 2023, Ford held the top three positions amongst the best-selling vehicles, with the Transit Custom leading the way, followed by the Transit and the Ranger respectively. Ford dominated in June too, with the Transit Custom and Transit retaining first and second and the Ranger placing in fifth.

Stellantis saw the Vauxhall Vivaro finish third in June, the Citroen Berlingo in sixth (1,595 units), the Peugeot Partner eighth (1,420 units) and the Vauxhall Combo 10th with 1,175 units. The Renault Trafic claimed fourth, the Mercedes-Benz Sprinter secured seventh with 1,486 units and the Volkswagen Transporter finished ninth (1,325 units).

Electric slump

Although June represents the sixth consecutive month of rising deliveries, only 1,775 new all-electric vans were registered in June, an 11.9% decrease on 12 months ago. Year-to-date, there were 8,803 all-electric van registrations, an 8.7% year-on-year increase.

However, this equated to a reduced market share of 5.2% from 5.6% in the first half of 2022. Vauxhall continued to lead the new electric-LCV market and the Vauxhall Vivaro Electric remains the country’s best-selling electric van.

The Zero-Emission Vehicle Mandate is due to be launched next year, requiring every manufacturer to build an increasing proportion of zero-emission vehicles in the run-up to 2030. The LCV quota for 2024 is 10%, rising to 70% in 2030 and 100% by 2035.

This will be a huge task for manufacturers, with urgent action needed to accelerate uptake, ahead of its implementation in just six months. At the same time, efforts will be needed to overcome current deterrents such as unreliable vehicle range, a lack of suitable van-sized charging bays and sky-high energy prices.

The introduction of Euro 7 standards for new cars and commercial vehicles is also due to come into force in July 2025. The latest plans aim to further reduce pollutants from both internal-combustion engine models and electric vehicles.

This is at a time when resources are sorely needed for the research, development and engineering of new zero-emission vehicles and technologies. The significant levels of time and investment required to comply with the Euro 7 proposals could risk slowing down the ambitious transition to zero-emission transport.

More volume and choice

With the supply of used models returning and increasing new-van production, market cycles have returned to a level of normality after months of disruption. A little respite is expected through the summer, but volumes look likely to remain consistent. With more choices in the marketplace, buyers can be more selective. As a result, first-time conversion rates were down in the second quarter of 2023.

Late-year stock is still in short supply, while volumes in the small van sector have increased in the second quarter, resulting in some downward pressure on residual values. Sales of electric vans remain slow, with real-world performance and lack of charging infrastructure acting as the biggest barriers to adoption.

With an increase in stock availability, buyers have become more selective. Sales have remained strong but as a result of more marketplace volume, the average sales price slipped by 4.8% during June and by 7% compared with June 2022.

Older stock on the market

The average age of a used LCV sold in June increased slightly from 81.1 months to 81.9 months. Additionally, average mileage decreased by 0.6% month on month to 82,899 miles (133,413km). This is nearly 2,600 miles more than 12 months ago.

As with previous months, the used medium van segment was the most popular, accounting for over 33% of all auction sales. Meanwhile, the volume of 4×4 stock sold was the lowest (12.9%) but attracted the strongest average sales prices of £18,345 (€21,402), up nearly £4,850 on May. Large vans covered more distance than any other model type at an average of 90,688 miles, a near 1,500-mile increase on May.

In June, first-time conversion rates fell by 3.8% to 71.7% but remained 8.1% higher than at the same point 12 months ago. This decline was reflected across all sectors, with large panel vans returning the best conversion rate of 72.7% (down 0.6% on May). Meanwhile, the 4×4 vehicle segment recorded a fall of 3.4% to 72%, while medium vans saw a conversion rate of 71.6% (down 4.3%) and small vans had a conversion of 71 % (down 4.7%).

Used LCVs observed in the wholesale market last month rose 1.1% to nearly 42,000 units. A total of 50.5% of all vehicles on sale were valued at £20,000 or more, while 33% were on sale for between £20,000 and £10,000. At the lower end of the market, those LCVs on sale in the £10,000 to £5,000 price bracket saw volumes increase to 12.1%. Finally, those on sale for less than £5,000 also saw volumes grow to 4.4% of the overall market.