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Economic slowdown hits car auctions, says Manheim

The UK's wholesale used car market has started to slow midway though the second quarter of 2008, according to the latest report from Manheim.

Manheim's report shows average used car wholesale values in May 2008 were £6,768 which is 4% below the weighted average values in the period January to April 2008.

As the used car market has hardened, auction conversion rates have fallen by between 4% and 9% depending on the sector and this is reflected in auction sales volumes being down by an overall 12% in the month against April.

However, it does suggest that although stocks have risen in line with the downturn, they are still at manageable levels.

Manheim put the downturn towards the "changing conditions of the weakening economic climate which is impacting on retail sales, which in turn has a knock on effect to the wholesale market".

Mike Pilkington, managing director, Manheim auctions & remarketing, said: "There is no doubt that trade buyers have become much more selective in their purchasing, aware that there is clearly no shortage of choice.

"In some cases buyers are only replacing retail forecourt stock to avoid any over-stocking, with others still prepared to invest speculatively in the right vehicles."

Pilkington said the rise in fuel costs and the 10% price difference between petrol and diesel has seen Manheim increase sales of its small petrol engine family vehicles.

He said: "While demand for most diesel derivatives is still reasonably strong, there are signs that some of the economic attractions of this fuel derivative are not what they used to be.

"Not surprisingly, prices for the larger-engine executive car sector – diesel and petrol - are starting to suffer and there is no doubt that the top end 4x4s are under the most severe pressure."

Manheim's analysis is part of its new monthly report which replaces its quarterly edition and monthly bulletin update.



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