The European car market has had a strong shift towards smaller cars, according to the latest research by JATO Dynamics.
The news that the economic slump and taxation have driven customers into smaller, cheaper cars confirms what many already knew.
However, JATO is keen to point out that while lower priced small cars are winning market share from the larger more expensive segments, buyers who are prepared to downsize are still looking for well specified, fashionable products.
Likewise, manufacturers are seeking to maintain profitable margins by selling higher specification cars.
David Di Girolamo, head of JATO Consult, said: “The likes of Mini and Fiat are the leading examples of how manufacturers can take advantage of market trends. They have both made small, cheaper to run cars into desirable fashion accessories, and consumers are spending considerable sums of money buying high-specification versions.
“These cars satisfy the need for consumers to be buying smaller, more economic cars, yet still deliver the manufacturers a healthy profit, which hasn’t always been possible with small cars. Larger cars have historically delivered the greater profit.”
The JATO report studies a number of social and economic factors and the effect these have had on the new car market, car pricing and buying behaviour in the five largest European car markets – France, Germany, Italy, Spain and the UK.
BMW is also highlighted by JATO as a manufacturer who has responded admirably to changing market conditions.
Significant emissions saving technology introduced across its model range have made its larger premium models more acceptable to a greater number of buyers, while the introduction of the 1-series range has opened the brand up to a new group of consumers.
In the value sector, Dacia has won significant new market share by offering honest, no frills value for money at an affordable price point.
Although official list prices have risen in ‘real terms’ since 2003, the JATO report concludes that new cars represent better overall value for money than they did in 2003, by offering more space, better quality, greater safety and higher specifications than ever before.
To download JATO’s table of examples for specification-adjusted 2009 prices in contrast to the equivalent 2003 prices for the same vehicles, click here.