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Winter Weather affects start of 2009 season
Caravan Editorial and Market Trends - February 2010
The severe weather experienced in the winter of 2009/2010 had a major impact right across the UK, taking or seriously affecting the lives of a great many.
Within the caravan industry, with raw material stocks already significantly reduced, the resulting disruption to just-in-time supply lines had an adverse affect on production output. In addition, deliveries of completed units became all bar impossible for a period of time. Recovery of the delivery backlog will be more difficult to achieve due to the reduction in haulage capacity that occurred over the last couple of years.
Coupled with restricted access and water-logged ground conditions on parks, the whole caravan industry faces an uphill task to get everything in place in time for the season ahead.
Easter
In 2010 the Easter Bank Holiday religious festival occurs from Friday 2nd to Monday 5th April and that coincides with the official school holidays from 1st to 16th April. This will ensure the maximum demand for holiday accommodation during these dates and increase still further the pressure to have rental and privately purchased units delivered, sited and commissioned.
4x4 Vehicles
The extreme weather experienced during this winter has meant that 4x4 drivers who have previously been the object of much negative comment have ended up looking particularly smug. However, this may well be just a temporary respite and, although some people badly affected in rural areas will see the necessity for all-wheel-drive, the general trend is inexorably towards lighter vehicles.
This has been especially noticeable during the government’s Scrappage Scheme when many large but aged family cars have been traded in for compact alternatives, some of which have negligible towing capacity.
Although twin-axle caravans are still popular with many caravanners and with the dealers that specialise in them, we hear ever more frequent reports that demand for these hefty units is not what it once was. Since the emergence of similar sized single-axle layouts, that are both lighter and more manoeuvrable, demand for twin-axles has weakened markedly and an increasing number are now transported to seasonal pitches rather than being towed as tourers.
VAT Increase
This edition includes the latest prices applied to tourers since the reversion of VAT to 17.5% as of 1st January 2010. The majority of manufacturers limited their increases to merely the rise in VAT, except Bailey where prices for Ranger and Pageant rose by an additional 2%.
It has not yet been possible to include the latest prices for holiday and park homes, although here the VAT element on the moveable furnishings is a much less significant proportion of the overall price.
Bank Base Rate
The rate was held at 0.5% in January 2010 and it is believed that this is unlikely to increase before the second half of 2010, unless rising inflation forces the Monetary Committee to react sooner.
MARKET TREND Touring Caravans
According to figures released by the National Caravan Council (NCC), production of UK market touring caravans in the three months from September to November totalled 6,450 units; this was 21.8% above the 5,296 produced in the same three months in 2008. These figures highlight the extent to which UK manufacturers have been responding to the recent strong demand for touring caravans. However, due to the cutbacks made previously, the moving annual total (m-a-t) of production at the end of November 2009 stood at 20,236 tourers, still 25.5% below the total at the same point twelve months earlier.
Registered UK sales between September and November 2009 totalled 6,265 tourers, 4.3% above the total of 6,009 sales achieved in the same months of 2008. This confirms the extent to which stockholdings of new tourers in the supply-chain have been reduced. By the end of November the m-a-t of sales showed 20,544 tourers, still 24.7% below the November 2008 total.
New Sales
After the feverish activity of the October N.E.C. show it was inevitable that demand for new tourers would tail off towards the end of 2009. However, while some dealers reported a very quiet period others were reasonably pleased with the volume of site traffic.
According to Glass’s most recent trade survey demand for 2, 4, 5 and 6-berth touring caravans was well up on the same period twelve months previously, although this was slightly less pronounced for twin-axle models. Indeed, manufacturers are hard pushed to meet this rate of demand at the more cautious production tempo and delivery lead-times are extending noticeably. As a consequence there has been little evidence of a build-up of new stock and nearly half of all respondents confirmed their stocks were lower.
While the current strong retail market was illustrated by the 35% that reported discounts were lower, a similar proportion indicated a weaker situation regarding customer finance penetration, which had fallen.
Although they were not the only manufacturer to report tremendous sales success at the NEC show in October 2009 and also at dealer sites, Bailey Caravans did particularly well with their all new Pegasus range. This features a patented construction technique dubbed Alu-Tech, which reduces the number of body panels and also removes the need to penetrate these with fixing screws. The resulting structure delivers Grade III Insulation standards and its rigidity was amply illustrated by displaying a family car on the roof of a Pegasus model.
Whether or not all caravans will one day be made that way, as they claim, it is certain that all Baileys soon will. The next addition is the Olympus, which is due to be launched at the Boat and Caravan Show (NEC, 23rd to 28th February); this will stand alongside but inevitably replace the mid-market Pageant range, much as the Senator range has now been deleted. Given the complication of swapping their production lines between traditional construction and the new system it is anticipated that the whole portfolio will transition to Alu-Tech before the end of 2010; more launches are confidently anticipated.
Used Sales
Interest in used touring caravans was particularly buoyant throughout 2009 and this continued well into the latter part of the year. The recent survey showed that this had been the case for all types of layout, with the exception of continental and coach-built models.
As a consequence of this situation dealers’ stocks of mainstream tourers were at an all time low for most of last year. Even recently well over half of respondents were reporting this situation.
Affordability is at least as important for prospective buyers as the need to own the latest model. As a consequence the used market can look forward to another year of high demand. However, whether this demand can be fully and profitably satisfied very much depends on the inflow of second-hand stock, particularly during the first half of the year. It appears that an increasing number of sales may be attracting a part-exchange, although the proportion of these that actually turn up remains to be seen.
To reflect the current strength of the used market, the shortage of stock and the recent rise in VAT, the February edition sees an increase in values across all mainstream single-axle layouts. This is modest on older models where condition is a significant variable, but progressively more firm on tourers built after 2000 and particularly those from 2005 and newer. A more limited increase has been applied to twin-axle tourers, while values for continental and coach-built models have been held.
Holiday Homes
According to figures provided to the NCC, production of caravan holiday homes between September and November 2009 totalled 5,220 units. This represented a substantial 62.9% increase on the 3,205 built in the same three months of 2008, but was below the 7,111 built in those months during 2007. This brought the m-a-t of production to 14,712 homes by the end of November 2009, 25.6% below the figure at the same point last year.
Sales of UK market holiday homes totalled 3,595 units between September and November, an increase of 26.9% on the same months in 2008. However, the m-a-t of UK sales was yet to climb from the previous low levels, and the total at the end of November 2009 stood at 13,648 units, a fall of 26.7% against the previous total.
Prospects for the export market appear marginally more promising given that some eurozone countries are now moving out of recession and the pound sterling is still sufficiently weak to keep our prices keen. Invoiced sales of export holiday homes between September and November totalled 430 units, a slight improvement, although this was still down 14.5% against the same months in 2008. Moreover, there are reports of further orders in the pipeline, so we expect to see more positive figures in due course.
New Sales
Although retail interest at the Lawns and Beaulieu shows was not quite as strong as had initially been hoped, a modest improvement in business confidence resulted in an increased intake of orders, both for fleet replacement and for display. Now that we have moved into 2010 an additional number of parks feel that they may have under-ordered and have been calling manufacturers in the hope of finding availability in time for Easter.
As a result manufacturers have enjoyed reasonably full order books, at least into the first quarter of this year, and that has driven the sharp increase in production reported above. However, there needs to be a sustained improvement in demand if the order books are to be solidly filled for the remainder of the year.
Responses to Glass’s recent trade survey saw demand for holiday homes reported as broadly level with the same period in 2008, although views were noticeably polarised, some up but others down.
Stocks of new holiday homes both amongst distributors and parks had tended to fall.
Despite this a slight rise was reported regarding discounts, while there had been a significant fall in customer finance penetration.
Used Sales
Demand for used holiday homes was particularly strong during 2009 and this continued late into the year. Glass’s most recent survey saw over half of all respondents still reporting that demand was up.
As a consequence of the much reduced volume of holiday homes being traded-off by the major park groups many smaller operators struggled to find enough retail-quality units last year. While some of the more active buyers have recently reported securing sufficient stock for the first quarter still 50% of respondents indicated that their used stocks were lower than at the same point one year previously.
How soon, or whether at all the new and used markets come back into equilibrium remains to be seen. However, with demand for used holiday homes likely to pick up right across the age, size and price spectrum we reflect values unchanged for this February edition.
Park Homes
According to figures from the NCC 431 park homes were completed between September and November 2009, a 25.7% increase on the same months in 2009. However, the m-a-t of production totalled 1,197 park homes at the end of November 2009, 43% below the figure at the same point in 2008.
A total of 375 sales were recorded in the three months from September to November 2009, just 0.5% below the same months in 2008. This left the m-a-t of Sales at 1,165 homes by the end of November 2009, 45.4% down against the total seen twelve months previously.
Activity in the bricks-and-mortar market continues to pick up, with both the leading house price indices showing a positive trend. Halifax reported a 1.0% rise in house prices between November and December 2009, the sixth monthly rise in succession, while Nationwide reported slightly lower growth of 0.4%.
As a result prices have improved significantly since the low point early in 2009, up 9.4% since April according to Halifax, and by Nationwide up 8.9% since February 2009. In addition, the volumes of completed sales and of mortgage approvals have been increasing
Low interest rates have reduced the burden of debt servicing and, coupled with the previous falls in property prices, this has significantly improved affordability; especially for those on the lower rungs of the property ladder.
Prospects appear considerably better that at this point in 2009, although there remains uncertainty whether the recent trend will continue. Indeed, both the above indices suggest that prices for bricks-and-mortar property could remain broadly flat through 2010.
The severe weather experienced in the winter of 2009/2010 had a major impact right across the UK, taking or seriously affecting the lives of a great many.
Within the caravan industry, with raw material stocks already significantly reduced, the resulting disruption to just-in-time supply lines had an adverse affect on production output. In addition, deliveries of completed units became all bar impossible for a period of time. Recovery of the delivery backlog will be more difficult to achieve due to the reduction in haulage capacity that occurred over the last couple of years.
Coupled with restricted access and water-logged ground conditions on parks, the whole caravan industry faces an uphill task to get everything in place in time for the season ahead.
Easter
In 2010 the Easter Bank Holiday religious festival occurs from Friday 2nd to Monday 5th April and that coincides with the official school holidays from 1st to 16th April. This will ensure the maximum demand for holiday accommodation during these dates and increase still further the pressure to have rental and privately purchased units delivered, sited and commissioned.
4x4 Vehicles
The extreme weather experienced during this winter has meant that 4x4 drivers who have previously been the object of much negative comment have ended up looking particularly smug. However, this may well be just a temporary respite and, although some people badly affected in rural areas will see the necessity for all-wheel-drive, the general trend is inexorably towards lighter vehicles.
This has been especially noticeable during the government’s Scrappage Scheme when many large but aged family cars have been traded in for compact alternatives, some of which have negligible towing capacity.
Although twin-axle caravans are still popular with many caravanners and with the dealers that specialise in them, we hear ever more frequent reports that demand for these hefty units is not what it once was. Since the emergence of similar sized single-axle layouts, that are both lighter and more manoeuvrable, demand for twin-axles has weakened markedly and an increasing number are now transported to seasonal pitches rather than being towed as tourers.
VAT Increase
This edition includes the latest prices applied to tourers since the reversion of VAT to 17.5% as of 1st January 2010. The majority of manufacturers limited their increases to merely the rise in VAT, except Bailey where prices for Ranger and Pageant rose by an additional 2%.
It has not yet been possible to include the latest prices for holiday and park homes, although here the VAT element on the moveable furnishings is a much less significant proportion of the overall price.
Bank Base Rate
The rate was held at 0.5% in January 2010 and it is believed that this is unlikely to increase before the second half of 2010, unless rising inflation forces the Monetary Committee to react sooner.
MARKET TREND Touring Caravans
According to figures released by the National Caravan Council (NCC), production of UK market touring caravans in the three months from September to November totalled 6,450 units; this was 21.8% above the 5,296 produced in the same three months in 2008. These figures highlight the extent to which UK manufacturers have been responding to the recent strong demand for touring caravans. However, due to the cutbacks made previously, the moving annual total (m-a-t) of production at the end of November 2009 stood at 20,236 tourers, still 25.5% below the total at the same point twelve months earlier.
Registered UK sales between September and November 2009 totalled 6,265 tourers, 4.3% above the total of 6,009 sales achieved in the same months of 2008. This confirms the extent to which stockholdings of new tourers in the supply-chain have been reduced. By the end of November the m-a-t of sales showed 20,544 tourers, still 24.7% below the November 2008 total.
New Sales
After the feverish activity of the October N.E.C. show it was inevitable that demand for new tourers would tail off towards the end of 2009. However, while some dealers reported a very quiet period others were reasonably pleased with the volume of site traffic.
According to Glass’s most recent trade survey demand for 2, 4, 5 and 6-berth touring caravans was well up on the same period twelve months previously, although this was slightly less pronounced for twin-axle models. Indeed, manufacturers are hard pushed to meet this rate of demand at the more cautious production tempo and delivery lead-times are extending noticeably. As a consequence there has been little evidence of a build-up of new stock and nearly half of all respondents confirmed their stocks were lower.
While the current strong retail market was illustrated by the 35% that reported discounts were lower, a similar proportion indicated a weaker situation regarding customer finance penetration, which had fallen.
Although they were not the only manufacturer to report tremendous sales success at the NEC show in October 2009 and also at dealer sites, Bailey Caravans did particularly well with their all new Pegasus range. This features a patented construction technique dubbed Alu-Tech, which reduces the number of body panels and also removes the need to penetrate these with fixing screws. The resulting structure delivers Grade III Insulation standards and its rigidity was amply illustrated by displaying a family car on the roof of a Pegasus model.
Whether or not all caravans will one day be made that way, as they claim, it is certain that all Baileys soon will. The next addition is the Olympus, which is due to be launched at the Boat and Caravan Show (NEC, 23rd to 28th February); this will stand alongside but inevitably replace the mid-market Pageant range, much as the Senator range has now been deleted. Given the complication of swapping their production lines between traditional construction and the new system it is anticipated that the whole portfolio will transition to Alu-Tech before the end of 2010; more launches are confidently anticipated.
Used Sales
Interest in used touring caravans was particularly buoyant throughout 2009 and this continued well into the latter part of the year. The recent survey showed that this had been the case for all types of layout, with the exception of continental and coach-built models.
As a consequence of this situation dealers’ stocks of mainstream tourers were at an all time low for most of last year. Even recently well over half of respondents were reporting this situation.
Affordability is at least as important for prospective buyers as the need to own the latest model. As a consequence the used market can look forward to another year of high demand. However, whether this demand can be fully and profitably satisfied very much depends on the inflow of second-hand stock, particularly during the first half of the year. It appears that an increasing number of sales may be attracting a part-exchange, although the proportion of these that actually turn up remains to be seen.
To reflect the current strength of the used market, the shortage of stock and the recent rise in VAT, the February edition sees an increase in values across all mainstream single-axle layouts. This is modest on older models where condition is a significant variable, but progressively more firm on tourers built after 2000 and particularly those from 2005 and newer. A more limited increase has been applied to twin-axle tourers, while values for continental and coach-built models have been held.
Holiday Homes
According to figures provided to the NCC, production of caravan holiday homes between September and November 2009 totalled 5,220 units. This represented a substantial 62.9% increase on the 3,205 built in the same three months of 2008, but was below the 7,111 built in those months during 2007. This brought the m-a-t of production to 14,712 homes by the end of November 2009, 25.6% below the figure at the same point last year.
Sales of UK market holiday homes totalled 3,595 units between September and November, an increase of 26.9% on the same months in 2008. However, the m-a-t of UK sales was yet to climb from the previous low levels, and the total at the end of November 2009 stood at 13,648 units, a fall of 26.7% against the previous total.
Prospects for the export market appear marginally more promising given that some eurozone countries are now moving out of recession and the pound sterling is still sufficiently weak to keep our prices keen. Invoiced sales of export holiday homes between September and November totalled 430 units, a slight improvement, although this was still down 14.5% against the same months in 2008. Moreover, there are reports of further orders in the pipeline, so we expect to see more positive figures in due course.
New Sales
Although retail interest at the Lawns and Beaulieu shows was not quite as strong as had initially been hoped, a modest improvement in business confidence resulted in an increased intake of orders, both for fleet replacement and for display. Now that we have moved into 2010 an additional number of parks feel that they may have under-ordered and have been calling manufacturers in the hope of finding availability in time for Easter.
As a result manufacturers have enjoyed reasonably full order books, at least into the first quarter of this year, and that has driven the sharp increase in production reported above. However, there needs to be a sustained improvement in demand if the order books are to be solidly filled for the remainder of the year.
Responses to Glass’s recent trade survey saw demand for holiday homes reported as broadly level with the same period in 2008, although views were noticeably polarised, some up but others down.
Stocks of new holiday homes both amongst distributors and parks had tended to fall.
Despite this a slight rise was reported regarding discounts, while there had been a significant fall in customer finance penetration.
Used Sales
Demand for used holiday homes was particularly strong during 2009 and this continued late into the year. Glass’s most recent survey saw over half of all respondents still reporting that demand was up.
As a consequence of the much reduced volume of holiday homes being traded-off by the major park groups many smaller operators struggled to find enough retail-quality units last year. While some of the more active buyers have recently reported securing sufficient stock for the first quarter still 50% of respondents indicated that their used stocks were lower than at the same point one year previously.
How soon, or whether at all the new and used markets come back into equilibrium remains to be seen. However, with demand for used holiday homes likely to pick up right across the age, size and price spectrum we reflect values unchanged for this February edition.
Park Homes
According to figures from the NCC 431 park homes were completed between September and November 2009, a 25.7% increase on the same months in 2009. However, the m-a-t of production totalled 1,197 park homes at the end of November 2009, 43% below the figure at the same point in 2008.
A total of 375 sales were recorded in the three months from September to November 2009, just 0.5% below the same months in 2008. This left the m-a-t of Sales at 1,165 homes by the end of November 2009, 45.4% down against the total seen twelve months previously.
Activity in the bricks-and-mortar market continues to pick up, with both the leading house price indices showing a positive trend. Halifax reported a 1.0% rise in house prices between November and December 2009, the sixth monthly rise in succession, while Nationwide reported slightly lower growth of 0.4%.
As a result prices have improved significantly since the low point early in 2009, up 9.4% since April according to Halifax, and by Nationwide up 8.9% since February 2009. In addition, the volumes of completed sales and of mortgage approvals have been increasing
Low interest rates have reduced the burden of debt servicing and, coupled with the previous falls in property prices, this has significantly improved affordability; especially for those on the lower rungs of the property ladder.
Prospects appear considerably better that at this point in 2009, although there remains uncertainty whether the recent trend will continue. Indeed, both the above indices suggest that prices for bricks-and-mortar property could remain broadly flat through 2010.