Lowest Market Volumes in 14 Years
With challenging market conditions over the last few years, it is no surprise that recent research shows the 1-4 year old vehicle parc now stands at 7.5m, which is the lowest figure for 16 years.
A study* of the shifting profile of fleet and leasing stock over the last three years shows some key trends. Contracts are getting shorter; there has been a gradual shift back to petrol; vehicles now have a better than average Co2; there are more automatics and more 4x4s.
(*Source: Autofura, September 2013).
The stats show that the average term is down from 44 months in 2010 to 37 months in 2013. Down too is average mileage, with a drop to 56,088 this year, from 67,900 in 2010. What’s more, there has been a steady growth of petrol vehicles and over the last three years, with volumes increasing by nearly 40 per cent. Petrol now accounts for 20.4 per cent of the fuel mix.
Matt Dale, Director of G3 Remarketing supports these research findings: “We too have seen a shift in the profile of stock we are handling at auction. However, this does not directly replicate the findings supplied by Autofura. The uplift in petrol variants has yet to hit the remarketing arena and currently, diesel remains the dominant fuel type at auction.
“Terms have seen a downward trend and this is due to the slowly returning confidence within the wider economy. Looking back to 3-4 years when the country was locked into the recession, companies were reluctant to commit to renewing vehicle leases, preferring to extend existing agreements. With the reduction in term duration, G3 Remarketing predicts a direct correlation to the condition these vehicles will be returned in at the end of their contract.
“Over the last three years, rechargeable damage reported against disposal stock has increased by 16.4% and we feel this is directly related to the care and attention drivers have for older vehicles. The longer they have a vehicle, the less interested a driver becomes in looking after that vehicle.
“However, caution has to be raised about the increasing number of nearly new stock entering the market, generated by manufacturers to sustain production lines.
“In 2008, many manufacturers experienced somewhat of a bloodbath with production outstripping demand. Recently we’ve seen an increase in registrations and there is an ever increasing amount of 6-9 month old product being made available within the used vehicle market. In time, this will have a detrimental effect on the residual values especially in Q4 of this year. Looking further ahead, we would expect this to be reflected in future data with term and mileage continuing to fall.”