Glass s Monthly Car Market Report April 2018

Transcription

1 Glass s Monthly Car Market Report April 2018

2 Contents Foreword 3 New Car Market Overview 4 WLTP Ready Glass s guide to the new car emissions data 5 Seasonally adjusted annual rate (SAAR) analysis 7 Live Retail Market UK s fastest selling used cars in March 8 Used Car Market Overview 9 Residual Values Measuring our accuracy 10 The secret diary of a forecast editor 11 2

3 Foreword Welcome to Glass s Monthly Market Report for April This edition reflects on how tough Q1 has been for the new car market, contrasted by strong performance in the used car market. Glass s editorial team continue their robust accuracy in a volatile market with valuations for March within 0.6% of the market. Headline concern for new car registrations justified in Q1? New car registrations:12.4% down versus 2017 Diesel car registrations: 33.3% down versus 2017 Cast your mind back 12 months and remind yourself of the registrations spike resulting from changes made to Vehicle Excise Duty (VED). March 2017 set new records with 562,337 new car registrations. But, through the rest of 2017, registrations were lower than We expect the next few months to be more encouraging; however, with further changes to diesel VED from 1 April 2018 and WLTP (Worldwide Harmonised Light Vehicle Test Procedure) potentially affecting sales, the new car market would seem to be heading for another deficit year. Used car market in Q1 paints a different picture Conversely, the used car market continues to produce encouraging results. Some auction buyers believe more consumers are opting to buy used cars instead of new. Customers looking to either save money on monthly finance costs or simply withdraw from finance plans. Whatever the reason, so far this year the used car market is booming, with feverish auctions. First time conversion rates in January exceeded 80% First time conversion rates in February exceeded 85%. Glass s editorial team report March auction activity to be just as strong borne out by in the field observations and our analysis of the data. Jayson Whittington, Chief Car Editor, Glass s 3

4 New car market overview The UK new car market continues to suffer, with figures released by the Society of Motor Manufacturers and Traders (SMMT) showing registrations in March 2018 dropping by 15.7% versus March Market positives? March 2017 figures boosted by buyers purchasing vehicles before the new vehicle excise duty (VED) rates March 2018 represents the fourth biggest month since SMMT registration tracking began. March registrations 474,069 March 2018 vs 562,337 March ,594 diesel registrations in March 296,349 petrol registrations in March March diesel share 32.4%, down 11.1% versus 2017 Alternatively fuelled vehicle (AFV) registrations up by 5.7% (1,308 units) Sales channel split March 2018 versus March 2017 Business registrations down by 14.3% Fleet registrations down by 15.0% Private buyer registrations down 16.5% Best segment performance dual-purpose cars registrations down by 0.7% Year to date registrations Q registrations down by 12.4% Diesel registrations down by 33.3% Petrol registrations up by 3.5% AFV registrations up by 9.8%. Dual-purpose cars registrations 146,614, up 2.7% versus Q The last 12 months represents a year of decline with the new car market suffering from economic uncertainty, and continued rejection of diesel. 600, , , , , ,000 0 Fuel Type Registrations March 2018 vs March 2017 Total Diesel Petrol AFV 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% -25.0% -30.0% -35.0% -40.0% % Change Source: Society of Motor Manufacturers and Traders (SMMT) 4

5 WLTP ready Glass s guide to the new car emissions data WLTP will deliver informed decision making for car buyers There has long been debate about the accuracy of fuel economy and CO2 figures published by manufacturers. Although published figures are technically achievable, in the real world many consumers find them difficult to replicate. In some cases, a heavy right foot is to blame, but it is plausible that the NEDC (New European Driving Cycle) test is the cause. The replacement test is WLTP (Worldwide Harmonised Light Vehicle Testing Procedure). WLTP explained WLTP is stricter featuring an on-road test known as Real Driving Emissions (RDE). Testing also considers vehicle options and how they affect weight, aerodynamics or rolling resistance and their impact on emissions. What is the difference between WLTP and RDE? WLTP is a laboratory-based procedure RDE is an on road test complementing WLTP measuring NOx and particles WLTP timeline Introduced in September 2017 for all new model launches, WLTP will apply to all new cars registered from September However, as the Government has announced that vehicle excise duty (VED) and company car tax (CCT) will continue to use NEDC figures until 2020, manufacturers will be required to provide both sets of figures, NEDC and WLTP. RDE timeframe NOx emissions are required to adhere to conformity factors in two stages: RDE1: September 2017 factor 2.1 for new models RDE1: September 2019 factor 2.1 for all new vehicles RDE2: January 2020 factor 1.5 for new models RDE2: January 2021 factor 1.5 for all new vehicles Particle Number PN conformity factor: September 2017 factor 1.5 for new models September 2018 factor 1.5 for all new vehicles It is not practical to test under both cycles, therefore a new figure called NEDC correlated will apply; in effect the WLTP figure converted back to NEDC. Reports suggest some NEDC correlated figures will change significantly versus current NEDC figures. What is affected? The move to WLTP has had significant impact for car manufacturers. The new regime effectively requires costly and time-consuming testing as follows: all models all engine configurations for all fuel types all trim levels all options including all tyre and wheel combinations. 5

6 WLTP ready Glass s guide to the new car emissions data Brand perception The new test will negatively affect some manufacturers, especially for company car sales where CO2 remains the all-important measurement to drive CCT. Action by manufacturers to manage the negativity is likely to include: the withdrawal of specific engines or engine and option configurations re-engineering to improve emissions and fuel consumption simplification of complex ranges individual options packaged to reduce option complexity. What does this mean for new car registrations? In the 2017 Autumn Budget the Chancellor announced that there will be a new VED supplement on new diesel cars first registered from 1 April This means that the diesel car first-year VED rate is calculated as if they were in the VED band above unless those diesel cars meet RDE2 standards. However, post 2020 Jayson says, It is possible that models negatively impacted with the introduction of true WLTP CO2 figures, could fall out of favour with consumers, which would likely impact RVs. Will the market change? Nobody really knows what the impact of WLTP will be on the market. The real change is the fiscal impact in 2020 with the adoption of true WLTP CO2 figures. Until then, buying habits are unlikely to change. However, the recent media surrounding car emissions data has not been smooth. A negative stance on significant differences between NEDC test results and NEDC correlated could influence public perception and negatively affect sales rates and therefore RVs. Jayson says, At Glass s we are prepared for any scenario. Our databases are updated and ready to accept manufacturer WLTP and NEDC correlated figures and the editorial team is constantly watching for signs of any changes in the market to ensure our data remains as accurate as possible. Additionally, when WLTP tests are completed, some vehicles may fall into different CO2 emission bands with their new NEDC correlated values. This will force higher first-year VED rates. Impact on residual values The used car market has proven to be resilient to change over many years. In the short term, Jayson Whittington, Glass s Chief Editor says, WLTP or RDE is not expected to force major changes in demand that undermines residual values (RVs). 6

7 Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Feb-14 Jul-14 Dec-14 May-15 Oct-15 Mar-16 Aug-16 Jan-17 Jun-17 Nov-17 UK new car registrations SAAR (millions) Autovista Group Reproduction and commercial distribution is strictly prohibited New car market seasonally adjusted annual rate (SAAR) analysis The UK automotive market is in a period of decline; however by looking at it in seasonally adjusted terms, a better picture of developments within the industry can be found. Autovista Group has developed average seasonality based on registration figures between January 2009 and December 2017, taking each month s sales as a percentage of the yearly total and calculating the average. This can then be applied to the UK registration figures for the month, giving a predicted outcome for the year at that point. Calculating this showed the spike in the sale of new vehicles during March 2017, and the subsequent drop as new vehicle excise duty rates came into play in April. Taking last March s figures into the SAAR analysis, a figure shy of three million yearly sales was produced, dropping to around 2.2 million the following month. March has an average of 18.9% of yearly sales, thanks in part to new registration plate introductions. However, applying this to March 2018 registrations gives a figure of around 2.5 million units expected in This means there might not be such a drop in April, when sales figures are expected to start stabilising compared with the first drop in April New car registrations SAAR, January 2012-January 2018 With the economic outlook uncertain at best and the recent increase in interest rates, a recovery in demand is clearly not expected. Ultimately, SAAR analysis suggests a new car market of between 2.3 and 2.5 million units in 2018, essentially down between 2% and 10%. SAAR Poly. (SAAR) 7

8 Live retail market UK s fastest selling used cars in March Every month we analyse our Live Retail Pricing data, powered by Radar, to tell you what the UK s fastest selling used cars were the previous month. Based on over 8.4 million annual real trade car adverts on the UK s leading advertising portals, with a minimum of 50 observations, this data gives you an indication of what s selling well across the UK s used car forecourts. Our interactive online map allows you to filter the data by region or vehicle segment so you can see exactly what models are popular in your area or stock profile. NATIONWIDE These were the UK s fastest sellers at a national level in March (with 50 or more sales). MAKE AND MODEL AVERAGE DAYS TO SELL Dacia Logan MCV 24 Dacia Duster 26 Dacia Sandero Stepway 26 Hyundai i Fiat Bravo 28 FOCUS ON North West These were the UK s fastest sellers in the North West in March (with 50 or more sales). MAKE AND MODEL AVERAGE DAYS TO SELL Citroen C4 Picasso 20 Kia Venga 22 Renault Captur 23 Citroen Grand C4 Picasso 25 Peugeot 3008 Crossover 26 Access the full interactive map 8

9 Used car market overview The life cycle of the industry means demand for used cars rises in the wake of periods of high demand for new cars. For every new vehicle sold in the UK each year, there are about three used cars sold used car market stays strong, as 8.1 million cars change hands In 2017, 8,113,020 used cars changed hands. This was a dip of 1.1% versus 2016, but was still the second highest total on record according to the Society of Motor Manufacturers and Traders (SMMT). Demand through 2017 for alternatively fuelled vehicles rose by 21.3%, with zero emission used car sales up 77.1% surpassing 10,000 for first time. Condition at auction is key, as Glass s Editor Jonathan Brown pointed out. On a recent visit to one auction site, with high attendance, the conversion rate was 90% on the hammer with high-grade stock. Later in the week, at the same venue, the conversion was just 77%, on vehicles with a lesser grade condition. From Glass s research, the used market has become a two-tier system with nearly new vehicles over 8,000 finding it tough while quality higher mileage small cars are making good money. Currently, nearly new cars over 8000 are struggling to sell at auction because dealers know they will face competition from discounts on similar new cars. Wholesale used vehicle market There has been a gradual increase in used vehicle volumes going to auction over the last few years, and this trend is continuing in The first three months of the year have shown increased volumes versus As the new-car market continues to fall in 2018, and margins reduce, more dealers are putting increasing resources into used car operations. These dealers need access to a choice of quality vehicles. Already this year, the Glass s Editorial Team have observed dealers looking specifically for vehicles they can place straight on their forecourt or website. 9

10 Residual values measuring our accuracy How accurate are our current Glass Trade values? Glass s closely monitors the wholesale auction market and all observations gathered are used to help us to achieve our target of the Glass Trade Value being within 2% of the auction sale price. When our April values are compared to our most recent batch of auction observations, we find that we are 0.9% above the market on average. The image to the left is a snapshot of our accuracy reporting dashboard. Glass s subscribers get full access to our accuracy dashboard each month and filters include: vehicle type fuel type manufacturer. This means subscribers can see just how accurate we are on what matters most to them. Get full access to our valuation accuracy dashboard 10

11 The secret diary of a forecast editor FEBRUARY Cologne: Ford preview event for new Focus, Ka+ mid cycle action, new Fiesta Active and Fiesta ST I can reveal few details until after the official press launch but I can say the vehicles previewed are impressive new additions to the Ford range. Brussels: Lexus preview event for new UX Along with my European colleagues, we had a secret preview of the UX discussing elements of the design and engineering with the development team. As a bonus we also saw the new RX-L, a 7 seat version of the popular Lexus RX model. Seville: Renault track day event for new Megane RS The Jerez racetrack, regularly used for Moto GP and on occasion Formula 1, is an ideal location to put the all-new Renault model through its paces. The new car has a bloodline of tuned Renault Sport Megane variants to live up to that have become favourites among enthusiasts across Europe. The new car does not disappoint. It is exciting to drive and has some grown-up technology on board, such as the four-wheel steering system. This system stabilises the car while increasing the fun factor. When you first jump in, it feels a little weird with drivers tending to turn-in a little more than required. For the best fun, I would recommend going for the manual gearbox as it is still more engaging than the much-improved automatic. Swindon: Honda test drive for new Civic diesel Although many manufacturers are looking at moving away from diesel powertrains, Honda believe that putting a very good, heavily revised, diesel engine into the new Civic makes perfect sense. I agree with Honda. I believe that there are still sales opportunities for diesel and that the engine can still play a big part in the UK car market. The diesel engine complements the car perfectly and has a claimed 80.7mpg, ideal for drivers regularly eating up miles on motorways. 11

12 The secret diary of a forecast editor Polestar 1 MARCH Geneva Motor Show Invited by Hyundai to join them at the Geneva Motor Show for their press conference previewing the following new models: Kona EV with a range of up to 292 miles Nexo Fuel Cell model New Santa Fe Le Fil Rouge a concept hinting at some of Hyundai s future car styling. Milton Keynes: Suzuki preview event for the new Swift Sport The Sport model is Suzuki s warm hatch version of their popular Swift model: 1.4 litre Boosterjet engine 140bhp 70Kg lighter versus the old model 44% torque increase up to 230Nm from just 2500rpm. Oxfordshire: Alfa Romeo test drive event for the new Stelvio Quadrifoglio The Oxfordshire countryside in Spring is the perfect location to drive the highly anticipated addition to the Stelvio range; the Quadrifoglio. I have been mightily impressed with how well the Stelvio drives, probably one of the best SUVs for driving pleasure. The Quadrifoglio takes the drive to a completely new level: 503bhp 0-62mph 3.8 seconds Quick and direct steering. The interior quality may not have the same solidity as some of the German machines but this is such a great car to drive that this does not diminish the experience. At 69,500, it is a similar price as the slower Porsche Macan Turbo with the Performance Pack (0-62 mph 4.4 seconds). The slimmed down weight helps with nimbleness and speed while improving fuel economy and CO2 emissions. 12

13 Glass s Monthly Market Report April 2018 Author: Phil Curry, Data Journalist, Autovista Group Contributors: Anthony Machin, Head of Content, Glass s Jayson Whittington, Chief Car Editor, Glass s Jonathan Wyatt, Analytics Manager, Glass s Andy Cutler, Forecast Editor, Glass s Media enquiries: media@glass.co.uk Glass s, part of Autovista Group 5 th Floor, Wellington House 125 Strand London WC2R 0AP w: e: customer@glass.co.uk p: +44 (0) Published by Glass s Information Services Ltd. All material Glass s Information Services