The market for prestige-brand compact executive cars will grow during the latter part of 2004 and into 2005, despite a likely slowdown in the overall new car market, says Glass's.

The compact executive sector is expected to benefit from the continued trend for downsizing in the fleet market, as well as from the growing numbers of private buyers converting from volume-brand hatchbacks.

"However, none of the prestige manufacturers will achieve their compact executive sales targets without resorting to discounting in the near- to medium-term," says Richard Crosthwaite, prestige car editor at Glass's. "Most dealers are still pushing hard to achieve new car targets so that they can become eligible for bonuses, and this is only possible in the current climate by offering discounts of around 6 to 10%."