Premium stock will provide best returns for CV dealers in 2009
Dealers of used heavyweight commercial vehicles are being urged to secure a quality stock-holding now, if they are to achieve sound profits in early 2009.According to EurotaxGlass’s, publisher of Glass’s Guide to Used Commercial Vehicles, the marketplace for second-hand trucks, tippers and tractor units is expected to continue to be sluggish into next year. George Alexander, Editor of the Guide, urges dealers to prepare themselves by ensuring inventories major on the most profitable units.
“During uncertain times, commercial vehicle buyers will typically be more concerned with reliability and quality,” he says. “Therefore, it is crucial that dealers ensure they provide a selection of vehicles that live up to this high standard.”
“When times are good, the price difference between the acknowledged leading marques and their competitors narrows. Yet the gap grows when there is talk of a recession. Commercial dealers will find that holding premium stock during times of hardship will pay dividend.”
Though prospects for the wider economy are downbeat, there are areas of the commercial vehicle market that are more resilient as Christmas approaches.
“Trade for panel vans is likely to keep ticking over, particularly for those vehicles in good condition. Towards the end of the year, business is typically led by those buyers needing a cheap set of wheels over the Christmas period. Consequently, the marketplace for clean vans costing between £2,000 and £4,000 remains in good shape,” Alexander concludes.
Used CV market – key trends
George Alexander highlights other key trends in the used CV market:
Used light vans
Currently, franchise holders are finding the going toughest though independent dealers are also being squeezed in a marketplace where customers are thin on the ground and are determined to have things all their own way.
At auction, trade buyers keen to acquire small vans with low, warranted mileage are facing stiff competition from end-users looking to save money and buy direct. In stark contrast, poorer examples with only average mileage are available in larger numbers and perform less well.
Ford’s versatile Connect continues to do well, despite the volume on offer, with options such as side-loading doors, ply-lining and air conditioning helping to generate a quick sale and good return.
Prime examples of Volkswagen’s Caddy Tdi also buck the downward trend and attract firm bids. Despite offering value-for-money and having the payload to carry a few extra parcels, prices for Citroen Berlingo, Ford Combo, Fiat Doblo and Renault Kangoo vans have slipped in line with flagging demand.
Vauxhall Astra Envoy and LS models are currently freely available on the open market with most interest reserved for those presented in ‘A1’ condition. New-shape 1.3CDTi Clubs fail to generate much interest from trade buyers.
Used panel vans
20-week lead times have evaporated, so dealers are being forced to do more aggressive deals on new. This and a combination of increased supply continues to undermine prices for late-year stock, with only the best examples attracting prices close to Guide Trade.
Accordingly, mixed market sentiment is to be seen across all panel van sectors. As their numbers swell, Renault Trafics and Vauxhall Vivaros are finding it difficult to maintain the prices they were achieving recently.
Volkswagen Transporter and Mercedes-Benz Vito still hold on tightly to the top slot with little change to the pecking order beneath them. In periods of market turmoil, prices for the nicest stock hold up best as these two Germanic stars prove.
Older front-wheel-drive Ford Transits returning to auction halls from utility company sources are acknowledged to represent good value. These low-mileage examples are typically returned in good condition, fully serviced and ready to go.
Oversupply of late-year, 3.5-tonne stock will further depress prices as buyers tighten their stranglehold. With such an abundance of choice, the scales tip in favour of clean and tidy product from the premium marques offered with good horsepower.
Clean chassis fitted with the best derivative bodies are still selling for good money with the exception of any commercial destined for the building or construction markets. Accordingly, dropsiders and tippers are especially out of favour with only the best examples achieving prices even close to Guide ‘Trade’ whilst good Ford lutons and boxes attract firm prices.
Used heavyweights
The number of 7.5-tonners on offer easily outstrips demand. Used buyers select only the best lots, typically bidding below Guide ‘Trade’ whilst lesser examples fail dismally.
In spite of all the gloom, there is a good turnout at each auction, though it is unclear whether people are there to get a bargain, to sell slow moving stock or just to reassure themselves that they aren’t the only ones suffering.
Decent prices have been recorded for a selection of 4x2 Royal Mail tractor units, with 6x2s making £1,000 more. A selection of older ERF artics, probably destined to go overseas, have also attracted good bids.
Other vehicles bucking current downbeat trends have included rigid chassis fitted with popular equipment, though vehicles with large cranes are currently failing to entice a trade buyer. A year ago they would have been snapped up.