Van sales in January 2012 were 16.4% lower than in January 2011.

The year has got off to a fairly limp start for van manufacturers, according to the Society of Motor Manufacturers and Traders (SMMT), with new van registrations in January totalling just 14,338 – down 16.5% on January 2011 and substantially below the SMMT forecast of 17,000.

New van registration figures Jan 2012 (courtesy of SMMT)

Despite this poor start, Paul Everitt, SMMT Chief Executive, expects things to improve, saying today:

“Over the course of 2012 SMMT expects the CV market to be steady, ending the year marginally up on 2011.”

Van sales are still up by 12.6% on a rolling year basis, with last year’s strong sales more than compensating for January’s disappointing results.

The graph to the right illustrates the changing levels of new van registrations since the late 1990s. Last year’s levels were a substantial improvement on 2010 but were still much lower than the levels seen in 2008, before the recession bit.

Although this might seem obvious, it is a marked contrast to levels of new truck registrations, which have recovered much more strongly.

Truckin’ Demand Is High

January’s fall in new van registrations was not reflected in new registrations for goods vehicles over 3.5t. In this sector, sales continued the trend seen in the final quarter of 2011 and rose strongly, rising 45.4% on January 2011.

While 3-axle artic registrations were up by 15.2%, the biggest gains were in the 6t+ rigid sector. Registrations of 6t-16t rigids were up 110% on January 2011 and 16t+ rigids were up 108%.

Rigids in the 3.5t-6t category only showed an increase of 19% – unsurprising, as operators of this class of vehicle are increasingly moving to larger trucks or large vans instead, depending on their requirements.

These trends are reflected in the rolling year registration figures, too. New registrations of <6t rigids have fallen by 18.3% over the last year, while registrations of larger rigids (>6t) and large vans (<3.5t) have risen by between 12% and 32%.

Jan 2012 truck registration figures (courtesy of SMMT)

This problem is that small rigids (<6t) are no longer as attractive as they used to be. The combination of speed limiters, tachograph restrictions, higher purchase and running costs and relatively low payload means that a modern 3.5t box van can often be a more suitable alternative for light work, while a >6t rigid with a substantial payload makes more sense for heavier work.

However, to my mind, the most interesting thing about the truck sector is that registration levels have recovered much more strongly than van registrations (see graph).

The only conclusion I can draw from this is that the UK’s haulage requirements are fundamentally linked to the basic needs of businesses and individuals – and that these recover quickly after a recession.

Conversely, van demand is linked much more closely to discretionary expenditure; an area that is still suffering badly as unemployment rises and average incomes fall in real terms. Even the new London LEZ rules have not caused the expected surge in new registrations.

What do you think? Does your business operate vans? Is it extending replacement intervals or even choosing to rent vans instead in order to meet unstable demand?