UK new and used light-commercial vehicle markets cool in November

12 December 2022

Year on year, both the UK’s new and used light-commercial vehicle (LCV) markets cooled in November. Andy Picton, chief commercial vehicle editor at Glass’s (part of Autovista Group) takes a closer look.

The UK’s new LCV market declined 22.2% in November, with registrations for the month at their lowest since 2013 and 13.4% below the five-year pre-pandemic average of 28,119 units.

There were 24,352 registrations in November, down from 31,320 units twelve months ago. Of those, 8.1%, or 1,974, were battery-electric vehicles (BEVs). Year-to-date (YTD) registrations of 260,314 units were down 20.1% on the same period in 2021. But, YTD BEV registrations were up 46.5% on 2021, at 15,039 units, making up 5.8% of the overall LCV market.

Compared with November 2021, all van sectors recorded declines in registrations. Vans below a gross vehicle weight (GVW) of 2 tonnes fell 70.9%. Vans between 2 and 2.5 tonnes GVW declined 63.5%, while vans in the 2.5 to 3.5-tonne sector – which made up 75.4% of all vans registered in the month – recorded a 17.9% drop. The pickup sector returned a 26.1% increase.

Looking at specific model ranges, Ford took the top three places, with the Transit Custom, Transit, and Ranger respectively. The Ford Transit Connect was tenth with 733 units registered. The Mercedes-Benz Sprinter claimed the fourth spot, while Volkswagen’s (VW’s) Transporter and Crafter models claimed fifth and ninth position respectively. The Vauxhall Vivaro was sixth, while seventh and eighth positions went to the Renault duo of Master and Trafic. The Vauxhall Vivaro Electric remains the best-selling electric van, with 496 units registered in November and 3,750 units registered YTD.

Despite strong order books for 2022, the supply of LCVs has been a problem all year. Rising costs and component shortages have affected the volume of new vehicles making it onto the UK market for well over 12 months. This makes the SMMT’s original forecast for 2022 of 363,000 units completely unrealistic. Each of the four quarterly forecasts has seen further downward realignments. The latest projection of 290,000 units looks to be missed as well, unless over 29,500 LCVs are registered in December.

UK van registrations remain a fifth down on the same point last year, highlighting current marketplace difficulties. Expectations are for a level of recovery in 2023 but with energy and raw material costs continually on the increase and shortages of some components still causing problems, a full recovery of the new-LCV market remains some way off.

Hot market to cool

The last three years have seen the industry deal with the pandemic and now an energy and raw-materials crisis, increasing the demand for used vehicles over the same period. With fewer new LCVs entering the marketplace, fleets have had to hang on to vehicles for longer, reducing the flow into the used market.

The resulting deficit in registrations will likely mean that the wholesale market will struggle for three-year-old stock over the next three years. The super-heated used market of the last 12 to 24 months is likely to cool and residual values (RVs) will soften in 2023, in line with the current economic situation.

November in detail

Glass’s data show that the overall number of vehicles sold at auction increased by 1.95% in November versus October, but was 4.63% lower than the same point twelve months ago. The most popular sector was medium vans, accounting for 38.25% of all auction sales. Meanwhile, stock in the 4x4 sector attracted the strongest average sales prices - £13,800. This figure is £400 lower than in October.

The average age of vehicles sold in November decreased by 1.8 months to 77.1 months. The average mileage reduced to 81,339 miles from 82,541 in October, and is over 2,000 miles more than twelve months ago. Vehicles in the large panel-van sector unsurprisingly covered more distance than any other sector, now averaging 90,581 miles. First-time conversion rates for November remain steady at 79%. The small-van sector returned the best conversion rate at 82% (down 2% on October), while the weakest performing was the large panel-van sector at 74.3%.

The number of used vehicles up for sale on the wholesale market remained relatively static, with volumes increasing by only 0.43% to nearly 40,700 units last month. Just over 47.5% of all vehicles on sale were valued at £20,000 or more, while 36.1% had a price tag between £20,000 and £10,000. At the lower end of the market, volumes increased slightly with 13.2% of all vehicles on sale for between £10,000 and £5,000. Those on sale for less than £5,000 reduced slightly to 3.9% of the overall market.