Fleet News

RV warning as car makers 'dump' Euro II models

MANUFACTURERS pre-registered thousands of cars last month as it became illegal to sell new vehicles which were not compliant with Euro III emissions legislation. With the December new car sales market up 27.5% and fleet sales last month up 18.1% manufacturers pre-registered stockpiled Euro II compliant vehicles which will now appear on dealer forecourts nationwide as nearly new vehicles.

And the massive dumping exercise has prompted a warning that buying 'cheap' new cars registered in 2000 today could cost hundreds of pounds in residual value losses in three or four years' time.

Manufacturers denied there was any problem with the new EU rules and said they did not have stockpiles of vehicles which only met outdated emission legislation to shift. However, last month's sales figures appear to disprove that claim and one leading fleet manufacturer said it believed the December new car sales market was 'inflated' due to the removal of Euro II cars from manufacturer inventories.

Euro II exhaust emission standards were introduced in 1997. Euro III emission standards were introduced on January 1, 2000 and became fully effective from January 1 this year, banning manufacturers from selling vehicles that only met Euro II standards.

It is believed that 'old' Euro II-only compliant vehicles have effectively been 'dumped' by some manufacturers. The Society of Motor Chris Macgowan, chief executive of the Society of Motor Manufacturers and Traders, said: 'I am sure it was a factor, although we do not have any separate figures for it. However, we are talking about relatively small numbers of cars. This is no different to having a sale of old stock.'

Stewart Whyte, director of the Association of Car Fleet Operators, who first highlighted the potential controversy, said: 'The vehicles are quite legitimate and legal but the manufacturers have been forced to distress market remaining stocks of Euro II-only compliant models. This could have a potential knock-on effect on residual values because while these cars might be cheap when compared with a 2001-registered vehicle, in three or four years' time there could be a £700-£800 residual value loss. In addition there could be an impact on personal taxation.'

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