Author Archives: Van Rental

Volkswagen fleet management services generate loyalty and incremental sales

Lucion Environmental Volkswagen Caddy

One of Lucion Environmental’s new Volkswagen Caddy vans

Although large businesses can justify the manpower and IT investment needed to optimise the total cost of ownership of their their van fleets, smaller firms have to take a certain amount on trust: there is only so much time you can spend analysing the maintenance costs, residual values and fuel consumption of vans when you only operate a handful of them.

Perceived reliability, efficiency and low running costs — plus a prestigious brand — are some of the reasons why Volkswagen and Mercedes-Benz vans are a default choice for many businesses in the UK.

Although they traditionally cost slightly more upfront, this extra outlay is usually compensated for by high levels of reliability and strong resale values — plus a great image.

A case in point is independent asbestos management company Lucion Environmental, which has maintained a relationship with Volkswagen Commercial Vehicles for more than 10 years.

To mark this important milestone, the Gateshead-based firm is now taking delivery of 25 new Volkswagen commercial vehicles, as part of its ongoing expansion.

The new Caddy and Transporter models will be used across Lucion Environmental’s seven offices nationwide. The firm specialises in the surveying and analysis of asbestos-containing materials, and delivers hazard management services to the built and marine environments.

Charles Pickles, Financial Director at Lucion Environmental, said:

“We are pleased to be continuing our relationship with Volkswagen Commercial Vehicles by bolstering our fleet with 25 new vans. Reliability is essential to the smooth running of our business and Volkswagen gives us exactly that.

“The business has experienced rapid growth especially over the last few years, and without a dedicated fleet manager on the team we rely on the Volkswagen Group Leasing service to ensure that our fleet is running at an optimum level at all times.”

As part of the deal, Lucion Environmental will take advantage of Volkswagen’s fleet management services – which are specially tailored to suit the company’s individual requirements.

These allow the company to benefit from additional services, including vehicle acquisition, service and maintenance management, along with a personal dedicated support system for drivers — all services which a large fleet might provide in-house, but which are generally not cost-effective for smaller companies to provide for themselves.

Used van prices up 10.3% on 2013 in September, says Manheim

Manheim selling prices Sept 14

Manheim selling prices, Spetember 2013 – September 2014 (courtesy of Manheim)

I may have spoken too soon: remarketing specialist Manheim has reported that the average value of vans sold during September 2014 was £4,692, which is £438 or 10.3% higher in comparison with the previous year, despite an increase of one month in average age and 263 miles in average mileage.

On the face of it, this suggests buyers are returning to their old habits, and are willing — or forced — to pay more, for older, higher mileage vans.

However, as always, the devil is in the detail.

First of all, it’s interesting to note that BCA’s average used van value during September was £5,560, whereas Manheim’s was just £4,692. I think it’s reasonable to assume that this difference is caused by some combination of a different age mix or a different model mix — there’s no way to such closely-matched competitors could sell the same mix of vehicles at such different prices.

Secondly, it’s worth noting that prices are down from the £4,786 peak reached in June this year, so it’s a rise relative to last year, but still lower than buyers were paying earlier this year.

Despite this, it’s clear that the used van market remains in rude health. The strong values in the used van market are also reflected in the percentage of original new price, Manheim’s unique comparison between the used and new price of vans. This measure shows that vans are currently achieving 28% of their original price, compared to 26% a year ago.

Looking at the data in more detail, Manheim’s analysis for September 2014 shows that the average selling price of small panel vans grew by 14.8% to £4,733 over the past year. Large panel vans over 3 tonnes saw a rise from £4,815 to £5,335 (10.8%) and car derived vans increased by £132 to £3,363 over the same period.

Matthew Davock, head of light commercial vehicles at Manheim, believes that van prices will continue to increase as winter approaches:

“The market performance has remained very healthy in the recent weeks, but stock shortages have remained a concern, which will maintain demand and prices. Vendors are typically enjoying conversion rates of 80% plus and when stock profile matches buyer requirements 100% sales are the norm, even with damaged product being snapped up in the absence of cleaner vans. We don’t see any significant changes in volume trends, which will only contribute towards a continued strong marketplace for the remainder of the year.”

A bull market will often run for longer than anyone expects, and so it is here: the shortage of good quality used stock is the consequence of the fall in new van registrations after the financial crisis.

However, I continue to believe that used van prices have now peaked: the continued rise in new van registrations must surely be weighing against used demand — and when increased volumes of new vans from 2012 onwards start to hit the used market, the pendulum may start to swing the other way.

Is the used van market turning in favour of buyers?

BCA van auctionAverage used van prices fell slightly in September, according the latest data from auctioneer BCA, despite the average age of vans coming under the hammer at auctioneer BCA continued to fall.

This marks the continuation of a trend I flagged up in August and which appeared to be confirmed by sales data from Manheim last month.

In my view, we’re now seeing a gradual fall in used van prices, although it’s worth emphasising that the used market does remain very strong, with prices at near-record levels and average sale prices of more than 100% of CAP values.

Falling age is key

Although the average price realised on used vans by BCA was £5,560 in September — the third highest figure on record — average age fell by three months, or nearly 5%, to 56.39 months, compared to the same period last year. This resulted in a corresponding fall in the sales vs. CAP price ratio, suggesting that vans are becoming slightly more reasonably priced:

All vans

Avg Age (mnths)

Avg Mileage

Avg Value

Sale vs CAP

Sept 2013

59.33

80,217

£5,158

105.19%

Sept 2014

56.39

80,591

£5,560

103.94%

Data courtesy of British Car Auctions (BCA)

Duncan Ward, BCA’s General Manager – Commercial Vehicles, says that economic and seasonal factors, combined with the long-running shortage of used supply is keeping demand strong:

“There can be little doubt that the improving economic background is giving a boost to the used LCV market, and small and medium-sized enterprises (SMEs) remain positive about future prospects.  The shortage of good retail quality stock is helping to keep values firm and competition is high for well-presented vans in good colours.”

“We are now moving into the time of year when the demand for parcel, courier and delivery vans of all types and capacities starts to ramp up, and this will help to keep values firm over the coming weeks.”

I don’t expect any dramatic changes in market conditions for the rest of this year, but I wouldn’t be surprised to see things quieten down a bit in the New Year, especially if the current strong growth in new van registrations — which ultimately increases the supply of and reduces demand for used vans — continues.

New van registrations rise by 14.1% in September

New van registrations continued to rise in September, climbing by 14.1% compared to the same period last year, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

So far this year, 242,071 new vans have been registered, an 18.1% increase on the first nine months of 2013.

Truck sales were down 12.3% compared to September 2013, continuing a year-long decline which the industry is blaming on the introduction of Euro 6 emissions rules for lorries: many truck operators chose to bring fleet renewals forward and buy new Euro 5 trucks just before the Euro 6 rules were introduced.

UK van and truck registrations: 2014 and % change on 2013

September % change Year-to-date % change Rolling year % change
Vans 49,123 14.1% 242,071 18.1% 308,140 19.6%
Trucks 5,374 -12.3% 27,385 -20.3% 49,251 7.8%
Total 54,497 10.8% 269,456 12.6% 357,391 17.8%

Data courtesy of SMMT (www.smmt.co.uk)

According to Mike Hawes, the SMMT’s chief executive, the van market is also getting an extra boost from operators who are downsizing from small trucks to improve utilisation and cut operating costs:

“With businesses feeling increased economic confidence and downsizing from larger vehicles, the van market has delivered another strong performance. This has also yielded growth in the whole commercial vehicle market, continuing the positivity seen throughout the majority of the year.

We are yet to see the truck market show signs of significant recovery following a flurry of registrations ahead of the Euro-6 introduction last year, which tempered demand going in to 2014.”  

The recovery in new van registrations has been impressive over the last four years: rolling year registrations have risen from less than 200,000 at the start of 2010, to more than 300,000 today.

SMMT van and truck registrations 2010 - Sept 2014

SMMT van and truck registrations 2010 – Sept 2014 (courtesy of SMMT)

As I’ve commented a number of time in recent months (most recently here), I believe the strong recovery in van registrations over the last couple of years is beginning to soften conditions in the used van market.

Although prices still appear to be rising, a closer look at the data suggests that this is because the average age vans entering auction is falling, not because age-adjusted values are still rising.

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Supertrucks Is First To Gain EC Type Approval For External Glass Racks

Supertrucks glass carrier vansFrom 29 October this year, all new commercial vehicles must have full European Community Whole Vehicle Type Approval.

This means — for example — that a new van cannot be supplied, pre-registration, to a converter to have body conversion fitted, unless that conversion has EC type approval.

While the Department for Transport has introduced some small-scale, common-sense exclusions — such as ply-lining — by and large, all modifications to the ex-factory van will need type approval.

This means that converters have two choices: send each van they convert for Individual Vehicle Approval tests — time-consuming and expensive — or obtains Whole Vehicle Type Approval for their conversions.

There is a third option, too — buy a van, register it and then supply it to the converter for modification: modifications made after a vehicle has been registered do not require type approval. However, as well as  being cumbersome, this is against the spirit of the rules and could affect the vehicle’s future resale value, as the vehicle’s body type may have changed since it was registered.

One company that has taken the type approval bull by the horns is bodybuilder Bevan Group, which obtained EC Whole Vehicle Type Approval for its vehicle bodies as long ago as 2009. The company acquired glass rack manufacturer Supertrucks last year, and has now announced that Supertrucks’ external glass racking products, which are known as frails, have passed whole vehicle type approval testing — making the firm the first to gain EC Whole Vehicle Type Approval for such products.

This achievement means that Supertrucks’ frails can now be fitted to unregistered vans and sold without any further checks — in complete compliance with current EC regulations. As Lee Dimmock, operations director at Bevan Group, explains, this is a major benefit:

“Having audited all of our systems, as well as Supertrucks’ products, VCA has now cleared Bevan to produce groups of vehicles fitted with glass racks, which will comply with current Type Approval regulations. The potential advantage in terms of reduced lead times is huge.”

Lee says some glass carriers have been exploiting a loophole in the regulations by purchasing and registering unmodified vans, then having them fitted retrospectively with external racks.

“But that means the vehicle which eventually goes on the road is not the one that was registered, and this can cause problems further down the line,” says Lee. “Responsible operators prefer to do things properly and ensure that their vans are fully finished, and approved, with quality racking systems and other features such as additional lighting already in place, prior to registration.”

The European Community Whole Vehicle Type Approval regulations are designed to ensure that new light commercial vehicles meet environmental, safety and security standards.

Supertrucks Manager Dave Hill adds:

“We have modified significantly the design of our frails to meet the requirements of the approval scheme, while maintaining the superior quality of the equipment. Our racks and other glass-carrying systems are widely acknowledged to be the finest in the industry, and are already exported to a number of European countries. The fact that we can produce and Bevan can now fit our systems here in the UK is a further step forward for the two businesses.”

Renault opens new van production line and confirms will build Fiat ‘Trafic’

Renault Trafic

The all-new Renault Trafic will be manufactured at Renault’s Sandouville plant, in Normandy, northern France.

Renault CEO Carlos Ghosn and France’s Minister for the Economy, Industry and Digital Sector, Emmanuel Macron, came together at Renault’s Sandouville plant in Normandy to inaugurate the company’s new production line, which will manufacture the new Trafic van.

Mr Ghosn also took the opportunity to confirm that, as expected, Renault will build a new van for Fiat from the second quarter of 2016, based on the new Trafic platform. The firm didn’t say whether it will simply be a rebadged Trafic or a re-worked model — with, say, Fiat engines.

Today was significant for Renault and the workers at the Sandouville plant, as it will be the first time this plant has ever produced light commercial vehicles.It will continue to produce the outgoing Laguna and Espace models in addition to the new Trafic until these cars are replaced.

Renault says that €230m of investment has been needed to prepare the plant and its staff for the new Trafic, but today’s opening means that Renault now produces all of its Europe-bound LCVs in France — a notable achievement, albeit one backed by a 2013 deal with the French government, called the ‘Contract for a new dynamic of Renault growth and social development in France’.

Renault is a major player in the European LCV market, holding a 14.5% share of the market at the end of 2013. At end-August 2014, global sales of Renault’s LCVs had increased by a further 5.7% — or 8% if all Group LCVs are taken into account.

The new Trafic is the sister model to the new Vauxhall Vivaro, which will be built at Vauxhall’s Luton plant, like the outgoing model — pretty much single-handedly propping up British LCV manufacturing in the process.

Supermarket service specialist chooses full basket of Mercedes vans

Montgomery Refrigeration Mercedes-Benz CitanThe arrival of the first Mercedes-Benz small van offering last year meant that Sprinter and Vito loyalists could — for the first time — satisfy their small van needs without being unfaithful to the three-pointed star.

This is a story that’s since played out in a number of fleets, including Belfast-based Montgomery Refrigeration, which specialises in providing installation and maintenance services for supermarkets.

The firm has operated Vito and Sprinter vans for many years, but had been forced to look elsewhere for its smaller vans.

However, Montgomery has now purchased 18 long-wheelbase Citan 109CDIs, to add to its fleet, meaning that the vast majority of the company’s 85-vehicle fleet now wear the Mercedes badge.

As  Michael Montgomery, the company’s Managing Director, explains, this offers a number of practical benefits:

“Our vans carry spare parts, tools and equipment but we need different sized vehicles for varying functions. Mercedes-Benz has always been our first choice as its vans are solid and dependable, well-liked by our engineers, and economical to operate. We’ve also been very well looked after by the dealer over the years.

“The introduction of the smaller Citan was a very welcome development – it means we can now source all our vans from a single supplier in which we have complete trust, and makes our lives easier because we now have a single point of contact for all our fleet requirements.”

The Renault Kangoo-based Citan has been well received by small and mid-sized fleet operators, and Montgomery isn’t the first company that’s bought the van on the strength of the performance of its larger siblings, as I’ve reported before.

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New Fiat Doblò Cargo unveiled at IAA Show

Fiat Professional branding

Fiat Professional badging will now be used on all Fiat commercial vehicles.

Fiat will launch an updated version of its Doblò Cargo small van for the 2015 model year.

The new version of the Doblò Cargo has been debuted at this week’s IAA show in Hanover. Changes focus on an updated exterior design and improved fuel efficiency and running costs, according to the firm.

The new model will have updated versions of the popular 1.3-litre and 1.6-litre MultiJet engines, both of which will also be available in a new EcoJet version of the Doblò.

The EcoJet specification will focus on delivering maximum fuel efficiency through the addition of features such as Start&Stop; low rolling-resistance tyres; low-viscosity oil; an ‘intelligent’ alternator; a variable-displacement oil pump and a new aerodynamic pack.

As a result, Fiat expects the EcoJet models to deliver fuel economy of up to 64mpg, with CO2 emissions as low as 115g/km.

Externally, the front end of the van has been updated to reflect the changes seen on the latest Ducato models, while the Doblò will also be the first Fiat model to bear the Fiat Professional badging, which will now be used on all Fiat commercial models.

2015MY Fiat Doblo Cargo

The new 2015 Fiat Doblo Cargo

Finally, like most other manufacturers, Fiat has an ever-expanding arsenal of electronic safety systems derived from traction control: the Doblò will now be available with ESC (Electronic Stability Control), ABS brakes with EBD (Electronic Brake force Distribution), ASR (Anti Slip Regulation), HBA (Hydraulic Brake Assist) and Hill-Holder systems that help the driver during hill starts.

Front airbags and front side airbags, as well as TPMS (Tyre Pressure Monitoring System) are also part of the Doblò’s safety arsenal.

The new Doblò Cargo will have a payload of up to one tonne and will be available with up to five cubic metres of loadspace. First UK deliveries are expected in Spring 2015.