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Demand for diesels increasing

Retail demand has continued in a steady vein throughout February. Clean, ready to retail cars are still making strong money, although there is reluctance from the trade to buy cars that require reconditioning work in any way, shape or form. Dealers are trying to cash in on the current uplift in the market and are unwilling to risk missing a sale while their stock is stuck in preparation.

The beginning of the year, as we predicted, has been positive, but it is vital that retail demand continues over the next few weeks. More used cars are expected to hit the marketplace and there will need to be an increase in demand to soak up the excess.

The daily rental and leasing sectors are also expecting more cars back this month, but the majority feel confident that this will not pose too much of a problem. New car demand remains steady as opposed to buoyant and dealers will probably still need to source cars from elsewhere with part-exchanges not around in sufficient volume to fill empty forecourts.

Auction houses report strong sales with conversion and performance against Cap living up to expectations. A word of caution though: it is a fine balance between just enough stock and a relative oversupply.

Many people are predicting an easing of values towards the end of March. If there is an increase in demand, there is no reason why this should happen. As far as the current market is concerned, anything in Cap Clean condition and with a sensible colour is making strong money.

Something we have noticed recently is an increase in demand for diesel engine cars, which seems to span all makes and ranges. Consequently, they are commanding an increased premium over their petrol equivalents. In particular, this is because there is a relative scarcity of diesels on the used forecourt. Executive diesels are among the most sought after with the new breed of BMW and Mercedes engines extremely desirable. This is a trend that we anticipate will gather pace.

The movement towards more economical cars is also reflected in increased activity around LPG vehicles. There has been a rise in popularity of conversions for older gas guzzling 4x4s.

Where previously, consumers may have chosen to avoid this type of vehicle, as they seek more economical motoring, the availability of a cheaper alternative fuel may put vehicles like the Land Rover Discovery V8 and Jeep Cherokee back in the picture. As LPG becomes more widely accepted, we may see a firming of values in this sector, although some manufacturers are still trying to overcome technical difficulties.

Overall, the picture looks reasonably positive going into March, but a successful retail month is wholly dependent on continued and increased footfall.

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