No year-end respite for UK’s turbulent commercial-vehicle sector

11 January 2023

Andy Picton, chief commercial vehicle editor at Glass’s (part of Autovista Group), explores how the UK’s new and used light-commercial vehicle (LCV) markets concluded 2022.

A turbulent 2022 ended with the UK LCV market down 20.6% year on year. With 282,139 units registered, this was the lowest tally since 2013 (271,073) and 22.9% below the 2019 pre-pandemic total of 365,778.

According to the Society of Motor Manufacturers and Traders (SMMT), there were 21,825 new LCV registrations in December, down 25.8% from 29,404 units 12 months earlier. Of those, 7.8% or 1,705 were battery-electric vehicles (BEVs). Full-year 2022 BEV registrations totalled 16,744 units, capturing 5.9% of the overall LCV market. This figure is up 31.2% on 2021.

Compared with December 2021, all sectors recorded registration declines last month. The pickup sector fell by 40.1%, while vans below 2 tonnes gross vehicle weight (GVW) declined by 65.4%. Vans between 2 and 2.5 tonnes GVW dropped 34.3%, and vans weighing 2.5 to 3.5 tonnes – which made up 75% of all vans registered in the month – recorded a 21.6% drop.

Ford takes top spot

The Ford Transit Custom finished 2022 as the best-selling LCV in the UK. Registrations of 42,215 units represented more than double that of its competitors and Ford took a near 40% market share. Ford also took the top two places in December, with the Transit Custom and Transit, along with the Ranger and Transit Connect claiming fifth and ninth position respectively.

Mercedes-Benz came third with the Sprinter, while the Volkswagen Transporter took fourth and the Crafter seventh. The Vauxhall Vivaro was sixth, while eighth and tenth place went to the Renault Master (943 units) and Trafic (579 units).

For the second year in a row, Vauxhall finished as the best-selling electric LCV manufacturer, moving 5,038 units. Once again, the Vauxhall Vivaro Electric finished the year as the best-selling electric van, with 4,212 units registered.

Despite strong order books for 2022, there were persistent raw material and supply chain challenges, as well as rising costs and restrictions on production. Promising early-year forecasts were scuppered as well as subsequently adjusted quarterly forecasts.

These difficulties are likely to remain until at least the middle of 2023, with a recovery expected to begin in the second half of the year. But, with energy and raw material costs still on the increase and shortages of some components pushing some model lead-in times out to twelve months, a full recovery of the new LCV market remains some way off.

On a brighter note, demand for all-electric vans continues to grow, with deliveries up 31.2% to 16,744 units in 2022. The SMMT expects the BEV market share to reach 8.7% in 2023 and 11.1% in 2024, but to achieve this public charging infrastructure needs to improve. The number of LCV-suitable charging points must grow across the UK, alongside incentives to encourage van buyers to make the switch to zero-emission mobility.

Used LCV market

The last three years have seen the industry deal with the COVID-19 pandemic, as well as an energy and raw materials crisis. With a reduction in registrations, fleets have held on to vehicles for longer, reducing the flow to the used LCV market. The deficit in registrations over the last three years will mean a reduction in similarly aged stock on the used market.

The super-heated used LCV market of the last 12 to 24 months has eased somewhat, but there is plenty to suggest that values will remain strong. Supported by a lack of late-year stock and variety, buyers have had to pay heavily for the best examples throughout 2022. Any substantial softening of values is unlikely to take place until volumes into the used LCV market increase.

December in detail

Glass’s data show that the overall number of vehicles sold at auction dropped in December. The quieter month saw volumes of vehicles sold drop 30.4% versus November, and 9.3% year on year. As a result, average sale prices fell by over £500 - the biggest month-on-month fall of the year.

As in previous months, the most popular used vehicle sector was medium van. It accounted for 39.4% of all auction sales, while stock in the 4x4 sector attracted the strongest average sales prices – £13,539. This figure is £260 lower than in November.

The average age of vehicles sold during December rose by 3.6 months to 80.7 months. Average mileage increased to 82,662 miles from 81,339 miles in November and was just over 400 miles higher than 12 months earlier. Vehicles in the large panel van sector covered more distance than any other, averaging 94,084 miles and up 3,500 miles on November.

First-time conversion rates for December dropped 3% to 76% overall. All sectors saw a decline in conversion rates, with the small van sector returning the best at 80.5% (down 1.5% on November), while the weakest was the 4x4 sector at 71.1% (down 6.5% on November).

Just over 39,300 used units were observed for sale in the wholesale market last month, falling by 3.4%. Just over 49% of all vehicles on sale were valued at £20,000 or more, while 35.2% were on sale for between £20,000 and £10,000. At the lower end of the market, 12% of all vehicles were on sale for between £10,000 and £5,000. Those on sale for less than £5,000 remained static at 3.8% of the overall market.