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'Strong' MPV market begins to weaken

The past two months have seen a surprising change in dealer buying habits as the market dropped off at the end of September and beginning of October only to surge in November.

Most dealers say that they are stocking up in anticipation of a shortage of good quality Cap Clean cars in December, probably due to vendors holding cars back as they expect higher values in January.

Others have had their fingers burnt in the past by disposing of over-aged stock in December and then having to replace them with similar cars in January, when traditionally there has been a lift in used car prices.

There are still a few companies being led by accountants that want to show a year-end profit and insist on disposing of cars, much to the frustration of the sales manager/buyer, who then has to replenish stock levels at higher prices in the new year.

Nearly new can prove to be a shady area of the market. This is because the customer is often reluctant to buy unless the gap between new and used is significant, demonstrably offering value for money. Plenty of manufacturers offer attractive new car sales incentives, reducing the expected retail margin for the seller of nearly new. This has in turn caused the gap between values of these cars and those at three years old to become narrower.

Auctions are reporting strong sales now, with high conversion rates. However these reports have been generated by volume players, who have a strong trade following and offer a wide selection of vehicles in good condition.

Mileage is fast becoming a major concern with sellers, as more and more company car drivers are extending contracts while they assess the new tax regulations. The expected three-year, 60,000-mile ex-fleet cars do not appear to be a problem, but those with higher mileage are proving to be a real burden. This is especially the case if the vehicle tops 100,000 miles.

The large MPV market, that has for a long time offered consistently high returns for most vendors, is now beginning to weaken. Reports suggest that the new breed of mini-MPV is the main culprit, offering the combination of space and comfort but without being too large and cumbersome for day-to-day use.

The Renault Scenic has been a familiar and a constant rival for some time. The new revised model is beginning to show in the auction arena and is creating a stir.

Other models placing pressure on large MPVs include the Vauxhall Zafira, Citroen Picasso and Toyota Picnic.

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