BCA reports that the end of the year has seen a very sudden and substantial increase in LCV stock in the marketplace coinciding with the traditional year-end slowdown for many traders and retailers.
The majority of these vehicles have come to the market well ahead of their planned de-fleet dates due to economic and business pressures on the operators and these additional units are topping up the already high volumes from the corporate and leasing sector.
Duncan Ward BCA’s general manager – Commercial Vehicles commented, “Following months of short supply in the market we are suddenly faced with an abundance of stock, just at a time when demand is easing ahead of the Christmas break.”
He added “Vendors with high-risk early return product will be trying to strike the best balance between conversion and price performance to maximise returns in the current market, while others will bank on an upturn in the New Year. The fly in the ointment could be if further ‘unscheduled’ volume de-fleets take place - even in an upturning market there will be an over-supply breakpoint.”
Ward commented “The price guides also need to have their fingers right on the button. December books will have been cast weeks ago reflecting an October market and will not have anticipated the sudden shift in conditions. If downward adjustments are made for the New Year – when the marketplace is likely to be on the rise – guide prices could be well adrift by mid-January.”
However, according to BCA, there will still be pockets of high demand for the right vehicles.
Ward said “Even amongst this over-supply, any two year old vans will be like "gold dust" to retail buyers and will generate a lot of interest in the trade as a result. This long-term legacy of the fall in new van sales during 2008 will continue to affect the market for several years to come – next year we will experience a relative shortage of three-year old vans.”
Ward concluded “The effect of this sudden oversupply has thrown a lifeline to buyers – who have faced a dearth of stock all year long – but has obviously affected the price and conversion expectations of sellers. One thing is sure is that for the remainder of this year, buyers will be spoilt for choice and sellers may find even sensibly reserved vehicles could remain unsold.”