Green shoots for fleet wholesale market, says Cox Automotive
Fleet wholesale prices at Cox Automotive rose to £10,575 in January 2020, up 8.0% year-on-year, and indicating “green shoots” for the sector.
Showing how activity has returned to the contract hire and lease sector, volumes of vehicles entering the market were up 5.1% year-on-year. The increase in volumes and prices comes with corresponding YoY falls in average age and mileage, down 11.7% and 4.2% respectively
However, Cox Automotive added that although wholesale fleet volumes are on the increase, global challenges for manufacturers may well have a knock-on effect later in the year; it added that there are already suggestions that vehicle supply has been affected by CAFE regulations.
The market has also indicated that coronavirus shutdowns may have an impact on OE and aftermarket supply chains, while the turnaround on the medium-term role of hybrid vehicles in the UK’s emissions reductions plans has left many leasing organisations reeling, according to Cox Automotive.
Philip Nothard, customer insight and strategy director, continued: “Having experienced the usual seasonal decline in both volumes and values in December, it is good to see that the fleet wholesale markets have taken a positive rebound to kick-start the new year. Indeed, with values up and both age and mileage down, YoY, all the key fleet wholesale metrics are certainly pointing in the right direction.
“When we look at the wider industry figures, we can see that new fleet sales rose significantly in December, up +7.3% YoY, perhaps as a result of manufacturer incentives to shift stock prior to the CAFE regulations. Overall, the SMMT recorded a more stable 0.8% increase in fleet registrations in 2019, but UK new car fleet average CO2 also rose for a third successive year, largely down to new WLTP testing regimes.”
According to SMMT data, January 2020 saw alternatively fuelled vehicle registrations reach the highest market share on record, at 11.9%, up from 6.8% in January 2019. Cox Automotive data also suggests a corresponding increase in volumes of hybrid and EVs in the wholesale markets, with both powertrain categories reflecting a YoY increase in values of 29.9% and 32.9% respectively.
Nothard added: “The recent announcement putting hybrid and plug-in hybrid vehicles in the same category as petrol and diesel engines when it comes to upcoming sanctions has caused a few shockwaves in the industry. With many fleets and leasing companies investing in these models as a viable gateway towards future fuels, there is a clear concern about what other changes may be on the horizon.
“With green shoots in the fleet sector, we don’t want to see confidence eroded to the point where decisions are delayed, and replacement cycles eroded once again. It is important that policymakers provide the industry with a clear direction of travel so that business can continue, and investment decisions taken with confidence.”