AM Online

Range confusion helps LCV makers hide pricing issues

##Dave Hill--left## “I'm expecting manufacturer passions be stirred by my by belief that drastic rationalisation of LCV model ranges is needed. But no apologies for that, because residuals are critical to everyone and any methods of improving pricing stability are worth considering.

Ranges at the CDV end of the market should be cut right back to one or maybe two, rather than the typical dozen or so derivatives. But why do the manufacturers confuse the market with these line-ups and what is the impact on values?

In my view it enables them to hide some of the real pricing issues. If you have a van that lists at £7,495 and you open the paper and see the same model advertised at £5,995, as a trader you will kick any late plate example of that van the next time you see it on the block.

The argument from the van maker will typically be that those vehicles could only be so heavily discounted because they were of a certain payload or some other aspect of the spec was different. Having only one derivative would remove that problem.

A transparently simple model lineup would make it very much more difficult to heavily discount without posing the risk of severe damage to perceptions of every example of that van – and save much confusion among retail buyers. This only really relates to CDVs because in the panel van market the various weights and technical spec really are more critical to the end user. And panel van values also tend to fall into wheelbase categories.

Nobody denies that manufacturers have to move metal to keep the factories going and big bonuses are inevitable when unexpected cancellations and mis-builds occur. But when vans are virtually given away under those circumstances the destabilising effect on the market is damaging to everyone – except for the traders who are 'nicking' them.

In the car sector, makers have occasionally dabbled in this idea by cutting back ranges and moving sudden surpluses by badging them as special editions. In this way pricing discrepancies become much clearer, to the benefit of the main core model.”

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest

Login  /  Register


No comments have been made yet.