CONFIDENCE is returning to the 4x4 market which only last year threatened to prove a costly option to fleets as residual values fell in what had been one of the strongest market sectors. Manufacturers say last year's downturn, which saw Ford drop the Maverick and Vauxhall axe its Monterey, is now over.

Mitsubishi is preparing the launch of its new Shogun Pinin, and Volkswagen and BMW are preparing 4x4 models. Mercedes has launched its M-class and Honda now has its HR-V. Renault will also introduce an off-road model to its Scenic line-up - the RX4 - which will be available with the new 140bhp 2.0-litre 16V variable valve timing engine or new 1.9-litre dCi common rail diesel, producing 105bhp.

Ramesh Notra, economist at CAP monitor, says the drop in residuals and confidence in the off-road market was an indication of what would hit the entire industry. He said: 'The 4x4 market was hit badly last year, but then the rest of the market followed with falling residual values, and many 4x4s are now a far better bet than cars in the executive sector. There is far more stability in the 4x4 market, and with plenty of product coming in over the next few months confidence should remain.

'The CAP used car price index shows that values for three-year- old vehicles in the 4x4 market are almost stable, with RVs currently down by just 1% year-on-year. This is a much smaller decline in values than registered in the market as a whole, where average values are down 4% year-on-year, in the UCPI.'

CAP's predictions are supported by the Economist Intelligence Unit, which has forecast that the luxury and sports sectors are to lose out to the sports utility sector, which will grow by 25% by 2004. This year has seen growth throughout the 4x4 market, which manufacturers are now breaking down into three sub-sectors. The total market has grown in the period January to July of this year to 60,876 units, compared to 50,014 units for the same period last year according to figures from the Society of Motor Manufacturers and Traders.