Healthy supply of vans keeps up pressure on prices

Manheim’s first monthly van Market Analysis reports that in August average commercial vehicle sale prices fell against July by 4.9% to £2,794. Although the fall was largely in line with seasonal expectations, overall volumes in the van sector continued this year’s trend of being significantly higher than the same period last year – up by 26%. With supply now outstripping demand, auction conversion rates have fallen back.

Whilst August prices in each van segment generally fell month-on-month between 4% and 8%, there were some more significant reductions: Refrigeration Units (down 29.7% to £2,361), Messing Units (down 18.3% to £2,188) and Tippers (down 12.1% to £3,846). However three segments actually bucked the trend and saw a price recovery: Large Panel Van < 3.0t (up 3.2% to £2,923), Boxes and Lutons (up 5.5% to £4,340) and 4x4 models (up 0.4% to £4,028).

It is important to note that prices this year need to be viewed in the context of last year when stock was in short supply. The average selling price in August 2008 was some £971 (25.7%) lower than August 2007 when it stood at £3,765. This downturn is supported by a reduction in the % New Price retained which fell over the same period from 28% to 21%, with age and mileage remaining largely static. This sizeable year-on-year fall in values highlights the contrast between record breaking 2007 sale prices and the inevitable effects of the gloomy macro-economic outlook in 2008.

In August, buyer attendances both online and in lane remained strong. However, with so much stock to choose from, buyers are inevitably becoming highly selective. Full documentation, service history, spare keys and correct presentation remain crucial to attracting most interest. Vendors are increasingly focusing on remarketing strategies which improve sales performance – enhanced valeting, selected reconditioning and even mechanical inspections are being utilised effectively to gain competitive advantage.

Alex Wright, Sales Director, Commercial Vehicles, Manheim Auctions said: “The outlook for the rest of the year still remains uncertain, albeit the current price falls are generally commensurate with seasonal patterns. This may indicate a level of stability arising, but the big proviso is, of course, the dependency on continued activity in the retail market. It is likely that a combination of high stock levels and continued economic instability will serve to keep pressure on prices, as trade buyers look to only replace sold stock, rather than just speculatively invest. The positive message for vendors is that there is still demand in the market, but that every effort should be made to ensure vehicles are hitting the market in the right condition and with realistic reserve prices.”