AM Online

Parker's forecourt focus: Difficult times for upper mediums

Anyone launching a car in the upper medium sector is taking a huge risk. The British public has gone off the traditional large family hatchback to such an extent that it’s in danger of becoming little more than a niche in the market.

Ford has long been king of the upper medium sector in the UK, and last week we saw the first pictures of the production version of the third-generation Mondeo.

It’s a fine-looking car, and will probably be very good to drive. But private customers are becoming increasingly aware that buying a new volume upper medium car is a quick way to squander thousands of pounds. They can expect to get back just a quarter of the money they spent when they trade it in.

This sector has suffered as customers are lured to premium-badge cars and small 4x4s – cars that, thanks to their stronger resale values, can end up being cheaper to run.

Nissan is already favouring cars that try to address the requirements of certain groups of customers rather than ones that are pigeonholed in sectors, such as the Note and Qashqai. Both should enjoy higher residuals than traditional equivalents – Note is taking more money as a used car than the Micra.

But competition continues to increase. Chrysler Group is about to launch two products into the upper medium sector – the Chrysler Sebring and Dodge Avenger. But they are unlikely to perform any better than mass-market rivals on the used market, as they are both saloons, when demand in the UK is for hatchbacks.

Cars that used to undercut mainstream models on price no longer can. The latest Kia Magentis, launched last year, has a list price 50% higher than its predecessor, while a 2.0-litre Volkswagen Passat has a lower on-the-road price than a 2.0-litre Hyundai Sonata.

And how about a new Suzuki upper medium offering for 2008? These products sound exciting to dealers, but the British public will take more convincing.

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