Figures compiled by firm KPMG and the automotive consultancy Spyder have highlighted the effect of down-sizing by car buyers, and the gap between list and post-discount new car prices.

KPMG and Spyder note that volumes in the upper medium category declined by 28% between 1998 and 2002, while supermini sales rose by 35%. Sales in the lower medium category rose by 17%. Lower medium and supermini categories accounted for 63% of all new car sales last year.

The KPMG/Spyder Weighted Average Prices for each category show that lower medium category list prices increased by over 4% between 1998 and 2002, while the public perception has been of actual prices having fallen by 10-15% in that time.

Mike Steventon, Head of KPMG's Automotive Group, commented: “Major players like Ford and Vauxhall are now getting, on average, around six or seven percent less in terms of revenue per car they sell. Two notable exceptions to this have been BMW – who manage to keep selling more cars without diluting their more expensive image – and Hyundai, whose rising prices are an indication of their move into the UK car buying mainstream. The overall UK public's shift to smaller cars appears to be primarily driven by the declining popularity of the company car.”

Steventon continued, “It is no surprise to see manufacturers making some effort to protect list prices – and residual values. They have managed it most successfully in some of the high value categories with Weighted Average Prices in the sports and off-road vehicle categories increasing by 12-16% since 1998. The only segment bucking the trend is the mini category. Prices have fallen by over 10% as ruthless price cutting has come to epitomise a segment where only the Ford Ka is really selling well.”