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New car prices rise

The price of the average new car in the UK has gone up 3.1% over the past year, equivalent to a rise of £402.

Glass's says list prices are likely to rise further during 2005 as a result of mounting energy and steel charges pushing up the cost of vehicle manufacture.

"The dilemma facing manufacturers is that price increases will become effective at a time when demand for new cars is falling back from current levels," it says. "With car companies already operating on slim trading margins, it is unlikely therefore these increases will be countered by additional discounts and incentives. Instead, some imaginative new tactics will be needed to lure customers into showrooms in 2005."

The sector that has seen the greatest price rise over the past 12 months is the compact family hatchback (Vauxhall Astra, Ford Focus, Renault Mégane, etc), where the price of the average car has gone up by 5.9%. This result is partly influenced by the discontinuation of several lower-priced models, such as the Proton Satria and Kia Shuma.

Larger people carriers/MPVs have also seen above average price rises - up by 5% year-on-year. There have been price rises for superminis (up 2.2%), compact MPVs (up 2.1%) and larger family saloons and hatchbacks (up 2%).

Glass's says that more expensive cars - including most prestige-badge vehicles - have been subject to even more modest list price rises. For example, in the compact executive segment (including the BMW 3 Series and Mercedes Benz C-Class) prices have risen by an average of only 0.7%, while large executive models (such as Audi A6 and BMW 5 Series) have seen their list prices remain unchanged over the past year.

The only sector to see a fall is the lifestyle 4x4/Sports Utility Vehicles (SUV) sector, where prices dropped by 1% during the 12 months to November 2004.

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