Slow recovery extends beyond 2022 for UK light-commercial vehicles despite demand

12 November 2021

Andy Picton, chief commercial vehicle editor at Glass’s (part of Autovista Group), studies developments in the UK market for light-commercial vehicles during October.

Demand for new light-commercial vehicles (LCV) in the UK remains strong. Yet shortages in semi-conductors and raw materials have affected commercial-vehicle (CV) manufacturing in both the UK and abroad. Supply-chain challenges are expected to remain in place through most of 2022. As a result, the UK Society of Motor Manufacturers and Traders (SMMT) has downgraded its registration forecast by 24,000 units to 340,000 units for 2021. Although this figure is an increase on 2020, it represents a 13.9% decline on 2019 levels with the market not expected to recover until 2023 at the earliest.

Vehicle manufacturing is down 15.4% on 2020 and down 19.5% on the pre-pandemic five-year 2015-2019 average.

The UK’s LCV market declined by 4.6% in October, as semi-conductor supply shortages continued to affect LCV production. With many expecting these shortages to have a bigger downward effect on registrations, 27,420 new LCVs appeared on UK roads for the first time. This was only 1,333 units down on a COVID-impacted October 2020.

Year-to-date, the 294,656 units registered stands 24.4% (57,823 units) higher than in 2020, but is down 5.2% on the 310,682 unit YTD 2015-2019 average.

In October, registrations in all sectors, except vans under 2.0 tonne, recorded a decline. The pickup sector was down 16.9%, vans between 2.0-2.5 tonne fell by 16.6%, whilst vans in the 2.5-3.5 tonne sector – which made up 68.1% of all vans registered in the month – decreased by 8.9%, vans under 2.0 tonne increased by 100.5%.

In another strong month for Ford, the Transit Custom remained the best-selling LCV in the UK, with 4,359 units registered. The Transit was second with 2,982 units registered.The Transit Connect was in fifth place. Vauxhall remains the UK’s best-selling, electric-LCV manufacturer, selling 2,158 e-LCVs to date.

The UK’s top-five LCV registrations

Although demand is strong and registrations remain positive, with manufacturers working hard to fulfil orders, there is still concern in the automotive industry. Ongoing supply-chain issues and delays with bodybuilders continue to affect vehicle production, with many deliveries now not expected until the second half of 2022.

For used vehicles, average auction prices fell by over 1.2% in October, driven by a shortage of later-year, used-stock availability. A combination of increased demand for Euro 6 stock driven by the impact of new clear-air zones, the widened ultra-low emission zone, and the impact of fleet sustainability commitments, has seen demand for Euro 5 vehicles reduce.

With an increase in older Euro 5 vehicles now being de-fleeted and average age and mileage profiles now at their highest for some time, average-selling prices have dropped slightly. However, demand for Euro 6 stock continues to rise unabated, with used prices set to increase through the remainder of the year and into 2022.

Glass’s (part of Autovista Group) auction data shows that the overall number of vehicles sold in October fell by 25.5% versus September and was 24.2% lower than at the same point 12 months ago.

Average-sales prices paid decreased by 1.2% versus September but remain 17.6% higher than October 2020. The average age of vehicles sold has increased from 73.8 months to 76.1 months in October, whilst the average mileage increased slightly from 79,171 to 79,477 over the same period. The latest average mileage for October is 6,039 miles (+7.6%) higher than in the previous year. First-time conversion rates increased from 80.9% to 81.5% in October.

Medium-sized vans were again the most popular at auction, accounting for 41.4% of all sales in October, whilst the highest proportion of all LCVs sold – 43.1% up from 32% in September – were in the over six-years-old age bracket.

In nearly 36,000 used vehicles observed for sale in the wholesale market, 50.6% were on sale for in excess of £20,000 (€23,400), 32.4% were on sale for between £20,000 and £10,000, 11.9% were on sale between £10,000 and £5,000, and 5.4% for £5,000 or less.