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Megane leads the field as the market fragments

For the second year running, sales of the Renault Megane are growing faster than those of any other car in the UK. Analysis of detailed registration figures, published by the SMMT, shows the Megane added more than 25,000 units last year, a growth rate of 44%.

The remarkable success of Megane and Renault during 1998 highlights the changing face of the UK car market. In all sectors, sales are more fragmented than ever before as the old order breaks down.

The 'Big 3' continue to lose market share to the aggressive importers – Peugeot, Renault and Volkswagen. Toyota is emerging as the strongest Japanese brand though it still has some way to go in volume terms to overtake Nissan. The franchises which are really moving forward Mercedes-Benz, Suzuki, Daihatsu and Skoda.

Meanwhile Daewoo, dismissed by so many, has seen registrations grow by more than 39% in the year. The Daewoo Lanos is the sixth fastest growing model in the country and the brand now outsells Mazda, Saab, Seat, Jaguar and other high profile names.

Much of the Renault boom can be attributed to Megane Scenic, introduced in May 1997. The car created its own niche which other manufacturers have been slow to challenge and it faces no real opposition until the launch of Vauxhall Zafira this spring.

Toyota's growth has come largely from Avensis which easily outsold the lacklustre Carina E it replaced. Land Rover Freelander is the one bright hope for Rover Group which has seen registrations drop in all other sectors but even that success has been at a price – Discovery registrations are down by 6,000 units.

(Data follows the SMMT classification by sector although some models appear in sectors which are not recognised by all manufacturers.) A sector Registrations in the sector were up by over 65% and it is the fastest growing segment of the market, though volumes remain relatively low. The driving force is the influx of good quality town cars, such as Daewoo Matiz and Hyundai Atoz, plus the Suzuki Wagon R. The Fiat Seicento has replaced the Cinquecento but looks unlikely to achieve the same volumes against the new competition. The sector has probably peaked until the arrival of the much-heralded new Mini.

B sector The apparent loss of volume in this sector is due almost entirely to Rover's disastrous decision to scrap the 100 range with the loss of over 24,000 units. There is no evidence of loyal customers sticking with Rover and trading up to 200 in any significant numbers. Rather, sales have spread around other brands. Fiesta and Corsa have both lost volume to stalwarts such as Nissan Micra, Fiat Punto and the Citroen Saxo. The performance of Peugeot 206 – 10,000 units in three months of sales – is a pointer for the future. There is now a five-month waiting list for the most popular derivatives.

C sector Sales of C-sector cars picked up dramatically in the second half of the year, thanks to improved availability of Vauxhall Astra and VW Golf. Both were running well behind target after the first six months. The main volume increase came from Renault Megane though the sector remains strong throughout the brands. Even Ford Escort – the sector leader – held its volume despite selling a reduced range for the final quarter. Ford will have to work hard with Focus and bodystyle analysis reveals only 120 three-door cars were registered in the final three months of the year. Peugeot 306 increased volume, despite 206 launch, and the Corolla is finally winning some sales for Toyota, up almost 50%.

D sector In this hard fought market Volkswagen Passat and Toyota Avensis emerged as the stars. Although Mondeo lost some volume, both it and Vectra continue to dominate the sector. BMW 3 Series has been in short supply as the new model is introduced but has still managed to climb above Renault Laguna despite the latter's new engine and facelift.

E sector Mercedes C-class continues to dominate though the company should be less happy about E-class registrations which have dropped back significantly. Improved supply of BMW 5 Series has resulted in much better sales.

F sector The Jaguar XJ V8 totally dominates the luxury sector and there is little sign of anything else making an impact. Cadillac Seville has failed to establish a significant presence.

Off-road Growth continues at a remarkable pace thanks to fashionable cars like Freelander, Honda CR-V and Toyota Rav-4. Sales of more workmanlike 4x4s falling.

MPV Growth is slowing here – last year it was running at 28% – and there are signs of the market reaching saturation. Customers are switching to the compact MPVs which SMMT classifies as C-sector cars. Ford Galaxy, with its fleet market, is the only player of significance though new Espace has performed well.

Cabriolet/Convertibles New-look Mazda MX5 has revived a static market and outsold MGF toward the end of the year. The Saab 9-3 has simply replaced the old 900 range and, once again, it is Megane which has put on the volume.

Coupe The Coupe sector has shown healthy growth, thanks largely to the success of Ford Puma though it is interesting to note the bulk of Puma sales are still at the 1.7-litre engine size. Vauxhall Tigra has suffered at the hands of Megane Coupe which is still growing strongly with its 1.6-litre variant. Of the saloon-based Coupes, BMW 3 Series continues to dominate, followed by Peugeot 406.

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