Unpredictable and weak start to 2022 for UK commercial vehicles

15 February 2022

The UK market for light-commercial vehicle (LCV) registrations got off to a slow start in January. Andy Picton, chief commercial vehicle editor at Glass’s (part of Autovista Group) looks at the factors influencing the sector.

Not since 2013 has the UK’s new light-commercial vehicle (LCV) market got off to such a weak start. There were 17,566 new registrations in January, down 26.9% compared a year ago. Against a backdrop of continued semiconductor shortages, rising raw material and energy costs and erratic fleet renewals, January proved to be as unpredictable as ever.

Following a poor 2020, with figures badly impacted by the COVID-19 pandemic, January last year offered hope, with the best first-month registrations for 31 years. Therefore, January 2022 had a tough act to follow. The ongoing supply and energy issues, coupled with the continuing disruption due to COVID-19, are still having an impact.

Registrations of battery-electric vehicles (BEVs) in the month accounted for 3.7% (647 units) of the overall total, up 21.4% on the same point last year.

The slow performance in January saw registrations in all sectors decrease. Vans below two tonnes saw a decline of 53.9%. Vans in the 2.5-3.5 tonne sector – which made up nearly 66% of all vans registered in the month – fell by 29.8%. Meanwhile pickups fell by 17.4% and vans between 2-2.5 tonnes recorded a 17.1% fall.

The Ford Transit Custom had a more positive start, with the Ford Transit securing second spot and the Ford Ranger in fourth. Vauxhall was the UK’s best-selling electric LCV manufacturer again in January, registering 160 e-LCVs during the month.

Top five LCV registrations

Although the outlook for LCV registrations in 2022 is encouraging, there is a concern a cost-of-living squeeze and higher interest rates could result in a slowdown in online shopping as customers tighten their belts. This in turn, could slow down the need for more vans to support the home delivery market. Unpredictability will remain an issue, but component and raw-material shortages will slowly improve.

Dearth of used stock

In the used-vehicle market, the number of units sold dropped substantially in January, but average auction prices fell by only 0.4%. Driven by a dearth of quality Euro 6 stock, average prices at auction remain just shy of £10,000 (€12,000).

As was the case for 2021, demand for Euro 6 stock will continue as manufacturers struggle to supply new vehicles. Businesses will prioritise the de-fleeting of hard-worked and ageing Euro 5 vehicles that should have been replaced at the beginning of the pandemic. The increase in older, higher-mileage and poorer-condition stock in the used market will inevitably result in a reduction in demand as the year progresses.

More choice but subdued retail market

Glass’s auction data shows that the overall number of vehicles sold in January 2022 increased by over 45% versus December 2021 and was 10.3% higher than a year ago.

Although auction stock levels increased in January, trade bidding is cautious. This is due to more choice than at any time during the last two years and a subdued retail market. However, of those vehicles that have sold, the average price increased by 11.7% on December and 15.4% on January 2021.

The average age of vehicles sold in January decreased by six months to 72.4 months. Meanwhile the average mileage fell from 85,560 miles (137,695km) to 79,489 miles over the same period. The latest average mileage is 1.89% lower than 12 months ago. First-time conversion rates fell from 75.1% in December to 73.1% in January. Over 62% of all LCVs sold at auction during the month were more than six years old, whilst only 5.7% were under two years old.

Medium-sized vans continue to be the most popular at auction, accounting for 35% of all sales during January. Used vehicles observed for sale in January’s wholesale market increased by 1.4% to over 38,000, with just under 44% on sale for over £20,000. 37.2% were on sale for between £20,000 and £10,000, 14% on sale between £10,000 and £5,000 and 5% for £5,000 or less.