Commercial vehicle market hits nine-year-high at Manheim

• Age and mileage reach the highest point in nine years at Manheim during October
• Significant shift in Euro 6 product
• First time conversions and days to sell continue to strengthen as stock shortages are matched with buyer hunger
• Third strongest average selling price on record
• Fifth consecutive month above £10,000 price barrier

The average age and mileage of commercial vehicles reached levels not seen since 2012 during October 2021 as the used market continued to outperform expectations. Furthermore, Cox Automotive expects numbers to continue to climb as the commercial vehicle market closes in on what will be the strongest year ever seen for used van values.

Manheim October auction results

Manheim auction data demonstrates a significantly older profile of commercial vehicle with average age at 67 months, a four-month increase from September, and average mileage at 85,666, up 6,438 since the previous month. With stock typically of an older profile, the average selling price did drop slightly, down £536 to £10,398. However, the picture remains one of extremely high demand, with first time conversions at 80.3%, up from 77.2% in September, and average days to sell down at 11, a drop of two from the previous month, as stock continues to move quickly.

Matthew Davock, Director of Commercial Vehicles at Cox Automotive, said: "Manheim’s data continues to paint a picture of a market starved of stock, with vehicles moving through auction quickly, even at high mileage and age. However, there has been a slight easing in some values, with a minor fall since September. The biggest market alignment has been seen in the +110,000 miles sale bandings with vans being on average -11.3% from a guide points performance percentage compared to sub 90,000 miles stock.

"First time conversions and days to sell are continuing to show positivity as stock market supply continues to be outmatched by buyer demand and hunger."

Manheim continues to report extremely positive buyer feedback for the month, with 68% of dealers reporting stronger retail activity compared to September. Interestingly 73% of southern based dealers reported a positive uptake of Euro5 part exchange stock being taken.

Clamour for Euro 6 stock is noticeable

Cox Automotive is already predicting that next year’s market will be dominated by surging demand for Euro 6 vehicles, largely due to the impact of Ultra Low Emission Zones (ULEZ) and fleet sustainability commitments, plus the new supply challenges will continue to fuel this vehicle segment performance.

The average selling price for Euro 6 vehicles hit a new record in October at £15,184, up £509 from September as demand continues to increase. In contrast, average vehicle age remained unchanged from the previous month at 38 months and 57,631 miles.

There are signs of market softening for some Euro 5 product, where the average selling price sits at £6,319 with an average age of 90 months and 107,520 miles. The biggest softening has been seen in the +110,000 mileage categories sale bandings with vans being on average -11.3% from a guide points performance percentage versus sub 90,000 miles stock profiles.

Davock commented: "Ageing vehicle profiles are not overly alarming in the wholesale LCV market, since we know that fleet and leasing companies are holding onto stock for longer in lieu of new vehicle production challenges. This means the LCV parc on the roads is considerably older than seasonal norms and buyers are having to accept stock that perhaps does not meet initial specifications. With over 2.5 million reported Euro5 or older light commercial vehicles on the UK roads and in operation today, Davock predicts that the wholesale stock landscapes will be very different over the next two-three years as fleet replacement dynamics start to influence the overall market.

"Another alarming factor is the number of vans we are seeing written off or returned as non-runners. During October, average return stock damage increased by £667 compared to 2021 averages. The longer that vans are being held by fleet and leasing companies, the higher the chances that the vehicle damage and overall cost of maintenance will be recorded, which will continue to impact wholesale values and performance."

ULEZ changing market dynamics

According to Cox Automotive, it is likely the wholesale van market will continue to grow at this pace for some time to come as stock shortages will continue well into 2022. Fleets will continue to hold onto vehicles and demand will continue to grow, particularly with the recent boom in all sectors operating commercial vehicles in the UK today especially home deliveries and construction

A factor that is transforming the market longer term is the impact of ULEZ, which Davock predicts will change wholesale stock dynamics for at least the next three years.

He added: "It looks increasingly likely that Euro 5 product will dictate the wholesale headlines for the entirety of 2022 as many fleets prioritise age returns. This will make the wholesale market dynamics look very different to today. Moving forward, second life older stock will be more balanced as buyers will become even more focused on ULEZ compliance."