22 May 2019
A recent report commissioned by the Society of Motor Manufacturers and Traders analyses the role of the light commercial vehicle in the everyday life and economic activity of this country. It turns out to be an unsung hero whose contribution should be celebrated.
The ubiquitous van
Motorists navigating our increasingly congested towns and cities cannot have failed to notice the ever-rising tide of (predominantly white) vans. The average suburban street between the hours of 8am and 4pm is lined not only with skips but also tradesmen’s vans. During peak hours in the London Congestion Charge Area, 20 % of traffic consists of light commercial vehicles [LCV]. This is not surprising since the number of LCVs on our roads is now 4.6 million, a figure that has risen by nearly 60% since 2000, double the rate of growth of cars.
The van economy
Before we curse this as a hindrance to travel, we should consider what it means for the economy. According to the report, one in ten workers depends on a van to do his or her work. This amounts to 3.4 million people earning wages totalling £5.6 billion, and represents 11% of GDP. On top of this Britain is home to two major LCV manufacturing plants. In addition, there are many people involved in buying and selling new and second hand LCVs, and yet more engaged in converting them for specialist use. So the new and used van market is worth more than £10 billion a year.
The construction industry is the single largest user of LCVs with one million of them or 24% of the total. This is followed in second place by wholesale, retail and repair of motor vehicles. In third place is manufacturing and in fourth transport and storage.
Our changing lifestyle
There are several drivers of growth in the LCV market, all of which have something to say about the changing way we lead our lives and conduct our business. First, there has been a tendency towards downsizing from HGVs (those over 3.5 tonnes gross laden weight) to LCVs, to create more agile and flexible supply chains. In fact, contrary to what you might have deduced from the state of our motorways, the number of HGVs has declined by 2% since 2000.
Second, there has been a rise in the number of self-employed people from 3.3 million in 2001 to 4.8 million last year. The recession of 2008/09 gave a significant impetus to self-employment. Most privately-owned LCVs are used by SMEs and sole traders.
Third, the rise of online shopping. From 2010 to 2016 online sales by stores dealing mostly in foodstuffs has more than doubled. This has contributed greatly to the increase in 2.6 to 3.5 tonne category of LCV.
Another change that has occurred is the way in which vehicles are financed. In the past the typical finance deal was a 36-60 month contract hire. Flexibility is now the theme. There has been a rise in flexi-leasing, allowing shorter term contracts of 12 to 24 months. This is particularly useful for tradesmen involved in medium-term infrastructure projects who cannot be confident of the need for a van following completion of the current project.
Towards cleaner air
Up to now the LCV market has hardly been affected by the anti-diesel backlash that has caused such mayhem in the car sector. Virtually all LCVs are still powered by diesel; only 0.3% are electric. The SMMT are keen to stress the dramatic reduction in harmful emissions that has been achieved in the last 5 years since the introduction of Euro 6. The report gives a number of reasons for the negligible uptake in alternative fuels. Electric batteries are bulky and heavy and reduce payload capacity. Public charging points are too few, and most will not accommodate vans. One might add that refrigerated vans are particularly unsuitable for electrification.
The full report can be found here.
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