Finance could be the used trucks biggest stumbling block next year, according to James Davis, head of CVs at Manheim Remarketing.
He says the lack of finance – both here and abroad – could make 2013 a difficult time for the used CV market. Here are his comments in full:
“Evidence from the auction floor confirms the suspicion many industry watchers have had for weeks now; a lack of affordable finance is stopping buyers from purchasing used trucks from the retailer. And this stall in demand, driven by poor business confidence coupled to lack of finance, bank overdraft or available capital, is clearly subduing auction activity.
“Our regular analysis of the CV market earlier in the summer highlighted that demand was outstripping the supply of used trucks; now we see the market return to more normal conditions, with volumes appearing to match demand.
“While a lack of available finance is one factor that is having an impact on the state of the used truck market, there are other developments that are influencing demand for used trucks as we head towards 2013. The constantly evolving environmental regulations are another major consideration for operators as we fast approach the introduction of Euro-6 legislation in January 2014.
“From the rostrum, we’re seeing Euro-4 trucks fail to attract quite the same price premium as they did last year. This shift in the market is due to the fact that buyers are marching in step with legislation, and increasingly moving onto Euro-5 compliant units, given the fact that the introduction of Euro-6 is just over a year away. Operators are future-proofing themselves with more fuel efficient technology without paying the Euro-6 price premium in terms of higher list prices.
“While softening UK sales of Euro-3 and -4 tractor units would normally be buoyed up by healthy export demand, even this market is a challenge currently.
“Both in the UK and across Continental Europe, we’re still seeing an inconsistent truck market at present. Certainly, ongoing economic uncertainty across the Eurozone is dampening demand for commercial vehicles.
“Looking further ahead to 2013, in the run up to the introduction of Euro-6 in January 2014, we can expect to see replacement plans brought forward and more used trucks entering the marketplace. This may also stimulate the supply of Euro 3 trucks, which will help to improve the mix of stock available to the export market.
“The wholesale CV market is rallying following the seasonal dip in retail activity during the summer. This has been more pronounced this year than previously. If the CV market is any barometer of the health of UK plc, then the English patient is best described as stable. That is no bad thing, however access to finance is a worrying trend that could continue to subdue retail and export activity into 2013.”
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