AN explosion in demand for sports wagons - a blend of estate car and sports utility vehicle - is expected over the next five years. The Economist Intelligence Unit predicts that while SUVs account for just 5% of the market in Europe, Japan, Australia and the Middle East, global demand will grow by 19% up to 2005 with the biggest growth stemming from western Europe.

And the EIU's latest report 'Light Vehicle Niche Markets - global outlook to 2005' says niche vehicles now account for 43% of world demand for passenger cars and that manufacturers like General Motors, Renault, Honda and Toyota are well placed to capitalise on demand for sports utility crossovers.

It highlights a 90% rise in global demand for multi-purpose vehicles and a 65% increase for SUVs since 1995 as a clear indication of buyers' preference for 'more focused' products.

The report's authors say MPVs will have reached their peak by the end of this year (4.15 million units) but SUV estate and sports hybrids such as the Renault Megane RX4 and BMW X5 will take off, appealing to buyers who have already opted for SUVs such as the Toyota RAV4 and Lexus RX300.

'The steady growth of the SUV market provides plenty of scope for crossover and hybrid vehicle experimentation,' said the report. 'Such models will progressively appear towards the middle of the decade.' The EIU believes global sales - 5.175 million in 1999 - will exceed 6.1 million in 2005.

Sports car sales are expected to rise slowly in Europe against a worldwide reduction in demand (1999: 1.69 million; 2005: 1.57 million). The report costs £1,295 and is available from the Economist Intelligence Unit on 020 7830 1007.