LCV market in review 2017

After years of growth, the markets for both new cars and vans slowed down in 2017. The shortfalls were not unexpected as demand in both sectors had cooled off early in the year.

It’s also worth pointing out that year-on-year comparisons were against the record highs achieved by both sectors in 2016. It was always going to be a hard year to follow.

So why did the markets drop? There’s no shortage of explanations for the shortfall in the new car market. Consumer confidence was battered by a fragile economy, wage deflation and the government’s confused and confusing anti-diesel stance.

The fall in demand for new vans, or light commercial vehicles, is less clear-cut and more concerning. The sale of vans in the UK has long been seen as a barometer of the wider economy. When the financial crash hit, the van market had already gone into decline and when the recovery started, then van sales picked up.

It’s a simple truth that vans are bought for a commercial necessity, whether it be sole traders offering plumbing and building services, the new breed of independent online delivery services for online retailers, or the national supermarket delivery fleets.

New van sales in 2017

So what happened in 2017? According to the registration data published by the Society of Motor Manufacturers and Traders (SMMT), the van market fell by -3.6% to 362,149 units – the first decline since 2012. However, it’s worth noting it still closed at the third-highest level in a decade. Basically, anything over 350,000 new vans sales is pretty good going.

The market for car-derived vans weighing under 2.0 tonnes was the hardest hit, falling a massive -20.3%. Falling demand for heavy vans weighing 2.5-3.5t saw sales drop -3.1%.

However, demand for pick-ups and smaller vans weighing 2.0-2.5 tonnes saw increases of 7.8% and 2.3% respectively, compared with 2016. So it’s not all gloom and doom.

It’s also worth noting that demand in December 2017, not traditionally a strong month for vehicle sales as most buyers’ thoughts turn to the expensive Christmas season, increased 2.9% to 28,016 units.

Once again pick-ups were particularly popular, with demand rising 6.0% in the month, while registrations of larger vans weighing 2.5t – 3.5t grew 7.5%. Although demand for car-derived vans fell by -20.4% and small vans, weighing 2.0t – 2.5t, fell -5.7%.

Commenting on the figures Mike Hawes, SMMT chief executive, said; “While the market slowed in 2017, this was in line with expectations and demand remains at a high level. In fact, LCV registrations have increased 62.5% since 2010.

“For 2018, however, we expect the economic and political uncertainty to continue to affect the market so government must rebuild business confidence and encourage operators to invest in new vehicles given fleet renewal is the fastest way to reduce overall emissions.”

Top performers

The figures may have been down but some brands still did rather well.

It was a record year for market leader Ford, but then most years are good for the Blue Oval brand whose expanded Transit family continues to dominate the new van market. The brand sold 117,831 units in 2017, which accounted for a third of all UK van sales.

Andy Barratt, Ford of Britain chairman and managing director, said:  “Our van sales growth was particularly positive in an increasingly challenging market. Ford has consistently provided UK customers with the most appealing vehicle range and our LCV line-up is the best ever, offering class-leading vehicles in all key segments.

Volkswagen also performed well retaining its position as the UK’s second biggest van seller with sales of 41,474, although its volumes dropped as a result of the old Amarok and Crafter models being replaced, now giving the brand a completely new model line-up.

Commenting on the brand’s performance, director of Volkswagen Commercial Vehicles, Carl zu Dohna, said: “In 2017 we completed our range renewal and adjusted our sales strategy to ensure our focus was on sustainable profitable channels.

“By concentrating on retail, SME and the right model mix, we can ensure we maintain the competitive whole-life costs for which our vehicles are renowned, and keep a strong dedicated Van Centre network who are there to provide our customers with the total support package they need.”

Used van trends

If you’re not in the market for a new van, but are considering buying a used one, then don’t expect to do any deals on models that are not too old, with low mileage and in good condition; these are like hens’ teeth and fetching relatively high prices.

This is all down to high demand in the auction sector where 2017 closed strongly in terms of the number and quality of ex-fleet vehicles coming onto the second-hand market. Generally speaking, these are the best used vans to buy as they’ve been serviced and maintained to the highest standards to meet the conditions of their finance agreements, the downside is they are demanding high prices from the dealers sourcing them for stock.

If you’re after a good quality van and are prepared to pay near the asking price then now is a good time to buy as dealers are selling this batch of vans which they have sourced because they are ready to retail and requiring no remedial work.

Duncan Ward, LCV operations director at BCA, one of the UK’s biggest auction houses said:  “The used market for light commercial vehicles remained buoyant in the last quarter of 2017. Used van values continued a long-term trend of increasing in value, mostly driven by a change in stock profile as vans in the wholesale market became younger with lower mileage. ”

Furthermore, the market is being boosted by strong demand from the rising number of buyers needing good quality vans for online delivery services.

“There is continued demand for vehicles to go straight to work in the parcel delivery and courier sectors to meet the needs of the online retailers.”

So, if you’re buying new or used, then shop around and take advantage of some good finance deals currently on offer from main dealers and LCV specialists.

Top selling LCV models in 2017 by category

(Source: SMMT)