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Manufadurers control used supplies to boost residuals

22nd July 2004, Page 70
22nd July 2004
Page 70
Page 71
Page 70, 22nd July 2004 — Manufadurers control used supplies to boost residuals
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Which of the following most accurately describes the problem?

The overall message from Glass's Guide is that demand for used ats is booming — but some sectors are booming louder than others...

The general picture painted by Glass's Information Services is positive: 2004 is going better than 2003. But in the used vehicle market some potentially lucrative areas are suffering. George Alexander, chief editor of commercial vehicles, says there are three areas where quality is lacking in the used truck market.

In the two-axle rigid sector he reports that there's no shortage of 7.5-18-tonne ex-fleet examples, but he cautions that it is hard to source the "cleanest examples of popular trucks".

Demand is still strong in the multi-axle rigid marketplace, especially for skip and hook-loaders, but prices on tippers are starting to wane despite plenty of hard graft to return them to former glories.

Another issue is that all major manufacturers are controlling their used vehicle supply, which allows them to keep the best examples for their own used dealer network — Alexander says this defi nitely affects two-axle rigids.

Quality and power are the major factors further down the weight chain in the panel van sector.

If the used van on your forecourt is a low powered ex-fleet model it will struggle to sell. But if it's late year with a decent engine it's likely to sell quickly at a good price.The continuing demand for plenty of horses under the bonnet is good news for sellers of 3.5-tonne vans by Mercedes-Benz, Ford, Fiat,Peugeot and Citron The Sprinter, for example, is benefiting from the drip-feed approach of its used network, with independents fighting strongly for just a few 311s and 313s.

The rise and rise of the Vauxhall/Renault Vivaro/Trafic could soon be over, Alexander reports, as volumes start to increase on the used market. There are many lying in wait with the terms of their first contracts/leases nearing expiry. This implies that supply will swamp demand, which is bound to hit what have been strong residuals. Alexander has recently seen prices dropping on the open market.

The Iveco Daily 3.5-tonne panel van is struggling a little. with enthusiastic buyers in short supply.Alexander reports: "This marque has yet to strike the right chord with all in the used lightweight market" Once again,Dailys with powerful engines do relatively well.

LDV, traditionally the council and post office favourite, doesn't have a particularly good image but Alexander reports that recent facelifts and driveline revamps have at least maintained its appeal to its selected but loyal band of end users with updated transmissions and engines effectively improving power, economy and driveability. The Convoy Hi-Loader is seen as the leader of the LDV pack, especially low mileage examples.

The car-derived van marketplace is very competitive with sales volume seen as the main factor in residual prices.

The Ford Connect remains the market leader — used vehicle re tailers are keen to get them on the forecourt and are willing to pay plenty for the privilege.

Ford is only drip-feeding them onto the open market. Alexander says: "As new sales of Connects increase it will require more management input to ensure that a balance between supply and demand is kept."

Another winner is the VW Caddy (see page 58). Its undoubted qualities are backed up by a"strong used network strategy that ensures volume doesn't outstrip demand".

Good examples of the Renault Kangoo are performing well too, while prices have remained steady for Citroen Berlingos and Peugeot Partners.The latest version of the Vauxhall Combo isn't doing so well, however, with prices dropping as the market tries to absorb higher numbers of returning vehicles. u

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