Report predicts future used LCV supply gap

Report predicts used LCV supply gap

Commissioned by British Car Auctions (BCA) and compiled by Professor Peter Cooke and the team at Buckingham University Centre for Automotive Management, The Used LCV Market Report 2012 indicates that the availability of cheaper, good quality used LCVs will decline in the next few years. It’s due to the double whammy of lower new van sales since the recession and large corporate fleets keeping vans in service longer before selling them.

Cooke suggests this could have a direct effect on small businesses, partnerships and sole traders, the biggest buyers of used LCVs, and may even slow down economic recovery. The shortage of vehicles under five-years old could also present a real problem for the wholesale and retail LCV trade who could find it increasingly difficult to source good quality used LCV stock.

“Small businesses as a group are the largest buyers of used vans and typically prefer vehicles up to five-years old,” commented Cooke. “However, availability is falling because of lower new van sales since 2008 and the trend for larger businesses to hold on to vans for longer.”

Cooke confirms this will have a number of knock on implications for the LCV marketplace for several years to come. The average vehicle age will certainly increase significantly and there may be a reduction in the overall numbers of vans on the road. “There will be fewer ‘first time' used vans coming to market for buyers to choose from, which will affect price and impact used LCV supplies further down the supply chain.”

LCV registrations continued to show recovery in 2011 (see News Story), but they remain well short of the much higher volumes seen between 2004 and 2007, when annual new sales were well in excess of 300,000 units. This means around 350,000 fewer used LCVs will reach the used market over the next five years or so.

There is also a growing bulge of ageing LCV stock beginning to dominate proceedings. Forecasts show that nearly half of the available LCV stock in the UK will be aged nine years and over by 2016.

Cooke concludes: “The recession-driven slump in new LCV registrations between 2008 and 2010 and the slow recovery thereafter will continue to have a big effect on the shape of the country's LCV supply. Clearly, when new LCV sales plummet and remain low for such a prolonged period it has a powerful and lasting impact on the availability of used LCV stock.”

Click here to download the full BCA report.

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