Having the right vehicles for your market is a view echoed by Tim Holden, CEO of Norwich-based Holden Group. “We have definitely seen a trend towards lower fuel usage in some areas, although customers shopping among premium brands are less concerned. My view is that having the right type of stock at the right price is crucial.”

Dealers ‘should be cautious with D and E-segment petrol saloons’

Pietro Boggia, principal consultant at industry analyst Frost & Sullivan, explained that what to stock wasn’t a black and white issue. But he said dealers should stick to vehicles with what he called “high rotational potential”, and be very cautious with models like D and E-segment petrol saloons.

“Customers will be happy to get good deals with great value for money, but the risk for dealers is that they have to get rid of stock by giving discounts, reducing profit margin,” he said. Boggia said the mass market manufacturers were decreasing operations in the D and E segment, and this trend would continue so the vehicles become less important in the UK and Europe.

“It means less new car registrations and for used cars low residual values, especially for non-premium brands. Anyway, if there are fewer being developed they will be harder to find to sell.”

The exception will be the premium brands – which Boggia described as Jaguar plus the three Germans – with all other large car development shifting to the SUV segment, which would continue to expand. He believes there’s scope for profit in crossovers of any size and from any brand.

John Leech, UK head of automotive at industry analyst KPMG, said there was no doubt the overall trend was towards consumers downsizing.