AM Online

Winter provides boost for 4x4 sales

After two years of unprecedented volatility, the first few weeks of the year were always going to be full of uncertainty. 

This has been marked by buyers showing real caution when purchasing stock. With parts of the country still suffering the worst winter for 30 years and moving around the country made almost impossible by poor road conditions, it is no coincidence this month has seen 4x4 products again outperform all other sectors. 

The undeniable benefits of running a 4x4 have no doubt helped a sector which, only three years ago, was really on its uppers. It now seems the anti-4x4 sentiment has given way to the release of substantial pent-up demand.

Black Book this month reflects 4x4s outperforming CAP in previous weeks by an average of 2.9% at three years/30,000 miles. 

Just one note of caution should be sounded. The public seems to have a short memory and when the next fuel cost rise begins – which it surely will – and the increasing CO2-based tax penalties kick in, this market may yet soften again.

Executive models have also performed quite well this month. At three years/60,000 miles average values are up by more than 1% month-on-month. This sector really does have two very clear types of car on offer, which all hinges on specification. 

Without a higher than standard specification, especially on German cars, values can be affected. Strong service history vehicles in clean condition with sensible colour combinations are a must in the sector. Get this wrong and values will suffer. 

Of course, any car in good condition will sell at a price, but the problem with the less desirable spec level is that it can spell a long wait on the forecourt while all the preferable examples are snapped up.

This month has seen the largest improvements in diesel values for quite some time. 

The diesel overall average performance was 2.9% higher than petrol models. Over several months values have been closing, sometimes almost to parity.

Slightly cheaper petrol prices over diesel have always seemed to help petrol models remain popular. But when parity is reached it seems consumers will steer towards the perceived benefits of diesel and that is what we are seeing now.

With no real volumes of late plate vehicles entering the market at the moment, manufacturers seem to have much more control over this stock than in years gone by. This is helping to keep used car values strong. 

Our mid-month analysis showed that 09-59 sold averages were at more than 107% of CAP clean, falling to a respectable 101% of CAP clean at 09-09 across all models. 

In the short term we do not foresee any surge in the supply of late plate vehicles. 

Dealers are reporting good new car order banks for March, with both retail and fleet orders showing some momentum.
Dealers say they are taking retail part-exchanges in some numbers once these sales are concluded. 

Don’t expect a very large flurry of activity on and around the March 1 with customers queuing up to take delivery of their new car, but do expect a steady flow. I would expect this level of business to continue for some weeks, if not months, after March. 

This, in turn, will be a positive factor for the used car market as a steady but controlled stream of fresh used stock will keep the customers interested.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest


Login  /  Register

Comments

No comments have been made yet.