Unpredictability in CV market
Last year registrations of new light commercial vehicles (LCVs) fell by 3.6%, the first decline in five years. Last month, registrations rose by 6.4% on the same period last year, the best February performance in a decade.
In the truck world, a number of mergers among the major players in the haulage industry has supressed demand for new vehicles. Total registrations of new trucks fell by 2.6% in 2017 after two years of steady growth.
Driven by Brexit uncertainty, the current dose of economic jitters is affecting all parts of the market and businesses remain cautious regarding replacing their CV fleets.
Driving a pre-Euro 6 commercial vehicle into the London ULEZ will incur the so-called T-charge, adding £12.50 a day to the existing £11.50 congestion charge for vans and £100 for trucks, with owners who fail to pay liable to a fine of £130 for vans and £1,000 for trucks. The ULEZ will operate 24 hours a day, 7 days a week initially within the same area as the current Congestion Charging Zone (CCZ), and comes into force on 8 April 2019.
Andy Picton, chief commercial vehicle editor at automotive intelligence provider Glass’s, predicts that as more cities follow London’s lead and create low emission zones in the next two to three years, commercial operators who need to send vehicles into the affected areas will face a hard but simple choice – pay up or buy new vehicles.
Small businesses who retain their current vehicle will either pass on any extra charges to their customers or take a hit on their margins. Larger fleets may partially replace their fleets whilst moving some slightly older vehicles to areas not immediately affected by low emission zones.
Andy says that Euro 6 vans are beginning to appear on the open market with demand for latest technology ensuring that prices remain high, often leaving businesses to bridge a large gap from their current vehicle. Nevertheless, volumes at auction are likely to rise through 2017, giving some hope to struggling businesses that prices may start to fall on all but the very nicest examples.