May sees more growth for new LCVs as older models hit UK used market

16 June 2023

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The UK’s new light-commercial vehicle (LCV) market kept growing last month, while older vehicle supply stabilised used transactions. Andy Picton, chief commercial vehicle editor at Glass’s (part of Autovista Group) considers the latest developments.

The new LCV market grew for the fifth straight month in May, rising by 15.3% to 25,359 units. Year-to-date, 135,296 units have been registered, a 14.7% increase on 12-months ago.

All sectors apart from vans under 2 tonnes showed an improvement last month. Pickups recorded a 13.3% increase year on year, while vans between 2 and 2.5 tonnes gross-vehicle weight (GVW) and those between 2.5 and 3.5 tonnes GVW rose by 57.2% and 8.3% respectively. At 17,173 units, the latter accounted for 67.7% of the market. Registrations of vans under 2 tonnes fell by 42.3%, recording a total of 469 units.

Ford dominated the UK new-LCV market in May. The Transit Custom and Transit retained first and second positions respectively, with the Ranger coming in fifth. Stellantis saw the Vauxhall Vivaro finish in third, the Citroen Berlingo in fourth, Peugeot Partner in seventh (1,024 units) and Peugeot Expert in 10th with 702 units. The Mercedes-Benz Sprinter claimed sixth with 1,215 units, the Renault Trafic eighth (846 units) and the Volkswagen (VW) Transporter in ninth (760 units).

In the first five months of 2023, Ford held the top three registration positions with the Transit Custom, Transit and Ranger. These three models accounted for over a quarter of all new LCV registrations in the UK between January and May.

Numbers still down on 2019

Although May represents the fifth consecutive month of rising deliveries, registrations are still down 13% on the pre-COVID pandemic levels of 2019. Zero emission LCVs made up 19.7%, or one in 24 of all new vehicles registered in May. The 1,041 units equate to a near 20% increase on 12-months ago.

Year-to-date, battery-electric van registrations reached 7,028 units, 15.5% up compared to May 2022 (6,085 units). This means their market share remained stable compared to the same period last year with 5.2%. Stellantis leads the all-electric van registrations with a 63.8% market share, followed by Maxus with 11%.

Launching next year, the Zero-Emission Vehicle (ZEV) Mandate looks to force every manufacturer to build an increasing number 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. Those unlikely to meet the targets will possibly be deterred from selling diesel vehicles in the UK to avoid paying huge penalties. With current supply problems not fully resolved, this could be another issue for the industry to consider, alongside the need for rapid infrastructure improvement to support the anticipated influx of new battery-electric vans.

Older stock entering used-van market

An increasing number of operators are now de-fleeting stock that should have been moved on during the pandemic. This means there is a rising number of older LCVs available in the wholesale market. With the supply of two-to-five-year-old stock sparse, buyers are opting to purchase vehicles that are between five and 10-years-old, an age bracket where availability is more stable.

Sales of used-electric vans remain slow, with battery durability, affordability and perceived lack of charging infrastructure the biggest barriers to adoption in the used market.

May saw transactions increase by 2.5% when compared to April, while they increased by 7.3% year-on-year. Average sales prices have dipped by 2% compared to the previous month and are also 2% below May 2022 levels.

As with previous months, the used medium-sized van sector was the most popular. These models accounted for nearly 37% of all auction sales, while 4×4 stock was again the least popular, with just a 15.8% share. This segment did attract the strongest average sales prices at £13,500 (€15,775), down £1,433 on April.

The average age of vehicles sold during May decreased by one month to 81.1 months, with the average mileage of those vehicles climbing by 0.7% to 83,396 miles. This is just over 550 miles (885km) higher than 12-months ago. Large vans covered more distance than any other model type at an average of 89,141 miles, a near 300-mile reduction compared to April.

First-time conversion rates for May fell 5.5% to 75.5% overall, as older and harder-worked stock entered the market. Yet these conversion rates remained 8% higher than 12-months ago. This decline was reflected across all sectors, with small vans returning the best conversion rate at 76.7%, although this was still down 6.9% on April. The 4×4 pickup segment recorded a fall of 1.6% to 76.4%, medium vans saw a 76.1% conversion rate, down 5.7%, and large panel vans were at 71.6 %, down 4.7%.

Used vehicles observed for sale in the wholesale market last month rose 0.75% to just over 41,500 units. Of all vehicles on sale, 51.3% 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, 11.6% of all vehicles were on sale for between £10,000 and £5,000. Finally, those on sale for less than £5,000 remained at 4.1% of the overall wholesale share.