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Used budget brands threaten volume residuals

Budget brands are retaining better residual values over three years than volume brands in many of the core segments, according to new research from EurotaxGlass’s.

Its Market Intelligence Service study shows manufacturers like Skoda, Hyundai and Kia are beginning to make a real impact in the UK market place, and although some way behind the volume players in terms of market share, their expanding product ranges and improved quality is finding increasing demand on the used market.

Diesel cars have been growing strongly in demand for several years but the high new retail prices commanded by the volume manufacturers have led them to fare less well than the budget brands in terms of residual value. In all but one of the core market segments (the lower medium sector), budget diesel variants retain better residuals values than that those of the volume players. In some segments such as the upper medium market, the difference can be as high as 10% in favour of the budget brands.

The competition is different within the petrol market, with the volume brands showing a stronger hand. Despite this, budget models in the upper medium, executive and SUV sectors all retain a higher proportion of their original values and than the volume marques.

"Our analysis shows that the volume players are not having it all their own way in terms of residual values," said Alan Cole, editor, Market Intelligence Service at EurotaxGlass's.

"While neither volume nor budget brands look likely to threaten the premium models in terms of residual values, there is little doubt the budget brands are looking increasingly strong when compared to the volume manufacturers. This is a trend we expect to continue."

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