The UK's commercial vehicle market is forecast to be down by a quarter on 2019, and Cap HPI's CV expert Steve Botfield has warned the van sector's "landscape may have to change" for the medium term.
The coronavirus crisis has excacerbated an already declining LCV market. In January the Society of Motor Manufacturers and Traders had forecast a 2020 LCV market down 4.8% year-on-year to 348,000 units. Its revised forecast is for a 28% drop to 263,000 registrations in 2020, and hopefully recovering to a 340,000 market in 2021.
COVID-19 has caused disruption to supply and production lines, and caused many companies and SMEs to review their spending.
“With the social distancing in production plants in place for the foreseeable future, it will not be for a number of years before a return to the similar volumes we’ve seen in the past.
"At which point the landscape of the commercial vehicle sector may have to adopt different working practices and, subsequently, may have to change to accommodate best practice and environmental legislation," said Botfield.
During lockdown, which forced the closure of auction halls and vehicle showrooms, LCVwholesale transaction volume collapsed to around 3% of the usual level, but Botfield said in Cap HPI's recent webinar that this is now increasing, and more remarketing outlets are providing virtual sales and buy-now transactions.
Except for the two weeks prior to lockdown, the values achieved have been consistent against Cap Average, albeit with smaller volumes, he said.
He said the resilience of the used LCV market appears to be good, partly due to growth in home shopping deliveries by van.
Botfield said the reduction in future new LCV availability means the used vehicle may become an attractive option.
Cap HPI recent reported that dealers are becoming more active in readiness for opening showrooms in June, and although it ceased adjusting prices immediately as the Government announced the lockdown on March 23, as remarketing volumes are beginning to increase it expects to adjust prices of cars aged 5+ down at the end of May.