AM Online

Used car analysis: Brand snobbery alive and well, even in austere times

By Adrian Rushmore, managing editor, Glass’s

It will be no surprise to learn that the ‘value’ brands such as Skoda, Chevrolet and Hyundai have collectively managed to increase their market share in recent years  from 2% to 10%.

However, despite the financial climate it’s not just the lower priced end of the car market that is growing, the prestige sector is also expanding at the expense of the traditional mass market.

The popularity of the ‘value’ brands is easy to understand. They are well-equipped and offer value for money to buyers at the lower end of the price spectrum.

It is fair to say that this sector of the market also received a welcome boost from the Scrappage Scheme in 2009, as well as attracting interest from well-informed buyers who are seeking “more for less” in the challenging economic conditions.

These price sensitive buyers have moved away from the more traditional brands which make-up the lion’s share of the car market.

Over the last 20 years the mass market has suffered dramatic shrinkage with market share falling from 88% to around 65%.

Prestige car sales account for an even healthier market share to the value brands.

In the same period the prestige car market, that includes brands such as BMW, Audi and Mercedes-Benz, increased market share
from 10% to 25% and the trend looks set to continue.

The traditional middle ground seems unable to stem the tide of its falling market share, while prestige manufacturers appear to be able to do no wrong.

The mass market has a series of disadvantages as they are viewed as being indistinctive; lacking in build quality; suffering high levels of depreciation from new and being evolutionary rather than revolutionary.

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