It was going to take some doing, staying at the 2011 new van sales registration rates; the latest figures issued by the SMMT reflect exactly how difficult a proposition 2012 is going to prove. Whilst trucks growth grew in line with year on year figures van and light commercial vehicle sales were down a considerable 11.1%.
Last year saw a surge in the market after many firms had held out buying in 2010 purely because of the state of the economy. Their hands were more or less forced into the market place in 2011 as used vans coming onto the market became older, organisations squeezing every last mile out of their vans.
It can make commercial sense, keeping that initial outlay liquid for another year as uncertainty still shadows our economy, which the first quarter’s vans sales predict organisations may well do. Plus the fact an older model van generally attracts a cheaper van insurance quote over a brand new model, purely down to the value of the investment that the insurance broker is duty-bound to protect when you take out the policy with them.
And it certainly looks as if we’re going to have another lean year. One aspect that may also have had bearing on the first three months’ figures, especially for the sole trader as many light commercial vehicle owners are, is the rush that the housing sector had for first time buyers to save on Stamp Duty pre-March 24th.
No matter how much you save on fuel, tax and are successful in obtaining cheap van insurance, there aren’t many budgets that will stretch to a new home and a new van in the same quarter. As the housing sector has been quiet for far too long and consumers decided that by completing their move early this year they would avoid the 1% Stamp Duty being brought back into force, they may well have chosen (or had the decision made for them by their partner) that a house move was in order this year and the new van would have to wait.
However, Paul Everitt of the SMMT has another angle. Every organisation has a transportation budget and, in the event that extra income for transport will come through price increases – indeed, in the automotive sector itself, locking in prices for two or three ears is not uncommon – something has to give with the backdrop of ever-rising fuel prices. As the UK economy waits to see where the prices of fuel is going to stop and decisions on fuel levies are yet to be decided long term, perhaps fleet managers or finance departments are warning against the extravagance of new vans; rather, keep a hold of any extra cash in the transport budget for fuel increases as and when they hit the pumps and make considered decisions about the fleet when there is more clarity.
However, the rolling year is still slightly up, at 3.9%, due to a strong finish last year, but those record sales do dilute the picture somewhat and hide the underlying trend that the bottom is rapidly falling out of the new van market, whichever way you look at it. Do we have confidence back in the economy? We’ll let you be the judge of that.