LEADING industry experts have clashed over predictions that residual values of light commercial vehicles are unsustainable and are set to fall. The market is split between those who predict prices will remain stable and those who feel there is a risk of a sharp downturn over the next few months.

Alex Wright, group commercial manager for Manheim Auctions, said a downturn was inevitable and warned fleet managers to be reasonable with their reserve prices if they wanted to avoid a sharp fall in residual values.

He said: 'I shall probably be accused of talking the market down, but the situation at the moment forces me to warn fleet vendors that their best interests are served by avoiding being bullish.

'The LCV auction market has been on an incredible high for eight consecutive months and some vehicles have not depreciated in price over that time. It cannot go on much longer in its present state and prices could revert to their 'correct' value.

'If vendors continue to respond to the eight-month high by being bullish, there is a real danger that buyers will respond by forcing prices down sharply through not buying.'

He was backed by Paul Hughes, commercial vehicles editor at Glass's Guide, who said a shortage of stock in the market had caused a surge in prices, but that would not continue forever.

'There is a shortage in the auctions at the moment and that means people are paying a premium. How long that lasts, we don't know, but once supply picks up, residual values will have to fall back,' he said.

But Wright's comments were attacked by David Hill, senior CAP Red Book editor, who said: 'I don't really see values coming down in the marketplace, because there is not much trouble selling vehicles at the moment. No two vans are the same. This means there is no real benchmark to work on, so talking of a general fall in values is very difficult to judge.'

Duncan Ward, business development manager for commercial vehicles at British Car Auctions, said there was plenty of buyer activity at BCA's most recent multi-manufacturer Ad-Van-Tage sale at the Measham auction centre last week, when more than 70 professional buyers bid strongly on the stock on offer.

Ward said: 'Looking at the bigger picture, the van market will stay buoyant as long as there remains an underlying economic optimism and 'feel good factor' in the small business sector.'