AM Online

Eco premium for real thing

By Chris Crow, chief editor, CAP

With the constant upward trend of fuel prices and the growing importance of economy in used car choice, we are often asked about the ‘flagship’ eco brands and how they perform in the used market.

We are talking about the likes of Vauxhall’s Ecoflex and Ford’s Econetic and whether they are gathering a following or if there is any reluctance to adopt.

It’s a good question because, of course, such models are generally introduced with benefits for the first user uppermost in mind.

Given the trade’s legendary caution around new technologies and the perceived risk around potential reliability issues, there will always be some risk in the used market in terms of depreciation.

After all, there are still some traders who will avoid the Prius, despite the flawless record of its battery life and hybrid technology.

In general, the emerging ‘must have’ models are those genuine eco alternatives to existing models, featuring low resistance tyres, taller gearing, body streamlining, regenerative braking and stop-start which all genuinely deliver significant mpg and CO2 advantages.

So do these eco alternatives tend to enjoy a premium or do they quickly fall into line with their conventional counterparts?

This very much depends on the technology deployed. Manufacturers who deliver real-world running cost savings have in recent times been achieving premiums over their conventional variants.

But some eco brands can be more about style over substance, or minor tweaks to fuel economy. Where the eco brand is more cosmetic and reliant on just some improvements in engine efficiency, these tend to enjoy no premium over the standard variant.

In terms of performance rankings, as the table above shows, manufacturers such as Mercedes, Skoda and Volvo have established a genuine premium for their ecoproduct offerings over their mainstream models.

The most consistent is Volvo with its DrivE model line-up, including V50, S40 and C30, where the premiums are consistently in excess of 5%.

In addition, manufacturers that have fitted this technology to their smaller product offerings – such as Kia and VW – are enjoying considerable demand too.

We are also asked about any differences in used market perception and demand relative to the overall image of the marque.

For example, does the market take a similar view of BMW with EcoDynamics and Skoda with Greenline?

As the figures show, Mercedes has fared well despite the universal adoption of its BlueEfficiency engines across the model ranges resulting in what appears to be a premium of around 12.5%.

However, the position for premium manufacturers specifically is unchanged in so far as specification remains king.

Where there is a trade off between specification and economy the initial owner, typically a company car driver focusing on his P11d value, will choose the eco variant for obvious reasons.

But in the used car market focus remains on specification, suggesting that prestige remains top of the priority list here.
 

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