New and used LCV market goes from strength-to-strength in 2020 predicts SVA
The used van sector is in rude health as it enters 2020 and now the Brexit process has begun the market will continue to go from strength to strength predicts Shoreham Vehicle Auctions’ managing director Alex Wright.
2019 saw another buoyant new LCV sales year with registrations topping 365,000 and confidence in both the new and used markets is set to continue during 2020.
A 5.9% increase in year-on-year van sales in January also reinforces companies are feeling positive about 2020 as the LCV sector lives up to its reputation as being a vital indicator of UK economic confidence.
“Some fleets have been using Brexit as a reason to hang onto vehicles until they understand how leaving the EU would impact their businesses.
“Those companies will de-fleet their older used vans during 2020 that will help stimulate new van sales and will also provide a welcome supply of used vans to the market,” explained Wright.
“These will complement the newer 12-24-month old used vans that have been coming into the market from rental suppliers for the past year or two.
“A used market thrives on a good cross section of vans with different ages and mileages, and prices are likely to remain consistent when supply and demand are balanced,” he added.
Wright also cites increased government spending over the next three years as further stimulus for the new and used van markets.
“The growth of large UK infrastructure projects will mean more companies will be looking to grow their workforces and fleets, while sub-contractors will find themselves in demand and will want to invest in a replacement or newer used vehicle.”
Wright has seen many SMEs upgrade of their vehicles in the past 12 months, especially in the south of the country as more stringent emissions restrictions are introduced for vehicles travelling into London.
This will continue as city centres, in particular Greater London, dictate that unless drivers have a Euro VI diesel or Euro IV petrol LCV they will incur additional daily charges to enter the capital.
Panel vans are also being relied on more and more for the last mile delivery into city centres.
“Now that the Euro VI standard is coming up to four years of age, these vans are arriving into the used market from leasing companies. They are contributing to a better mix of used vehicles.
“More SMEs will be able to afford a used Euro VI van which has become the minimum specification for the majority of companies.
“Older Euro 5 diesel vans are likely to remain in demand in rural areas from small businesses.
“With used supply becoming limited as more vans reach the end of their lives, prices are likely to remain strong,” he added.