Strong euro threatens consumer offers

European car makers are under pressure to cut offers and discounts on new vehicles due to the falling value of the pound. The euro has increased in value against sterling by 17% since the end of 2002 meaning many manufacturers will either curtail promotional offers or increase new car prices.

Adrian Rushmore, managing editor of Glass's Information Services, said: “Manufacturers may retreat on offers now and then return with bold new offers just prior to the introduction of the September plate when the market is at its most active.”

An increase in prices is unlikely to counter recent accelerated rates of depreciation of used cars. “Dealers have been pre-registering increasing volumes of new vehicles over recent months to boost their sales figures and so, with plenty of three-month-old examples now being pushed into the used car market, there is unlikely to be any significant firming-up of values,” Rushmore said.