##CAPsml--left####Martin Ward--right##AS new car prices began to fall in the UK over the past few months, the lost confidence in the new and used car markets caused by the pricing conflict started to be restored. This led to a reasonable degree of stability for the early part of this year, but the market is now teetering.

As we all go around the country, and look in national and regional newspapers - as well as on dealer forecourts - the number of Y-reg, delivery mileage cars available seems unbelievable. We touched on this subject a couple of weeks ago and it seemed to ruffle a few feathers. It is true that some dealers registered cars to achieve new car volumes and meet first quarter targets, but this was not seen as breaking the Supply of New Cars Order 2000.

According to the Society of Motor Manufacturers and Traders, 382 cars were registered and declared as pre-registered by some manufacturers in March. That may be so, but it does not account for all those aforementioned Y-reg cars. However, a good many will be accounted for by the continuing flood of new imports from Europe. Dealers in some European countries have geared themselves up to the import business over the past couple of years, with most of their trade coming from exporting new cars to the UK.

Some have even begun to order right-hand drive cars for stock so they can offer immediate delivery. They are not going to suddenly lose those lucrative deals. Consequently they are fighting back and offering discounts, which previously were not available, in an effort to regain badly-needed sales. Many new and used car dealers are back again importing vehicles with a vengeance.

I was at one used car dealer this week and the bulk of his business is selling imports from the Republic of Ireland, Belgium and Germany. He had 30 in stock and a constant flow arriving, creating much showroom traffic. Not only is he making a small margin on the new car sale, but more importantly to him is getting a supply of nice 'swappers'.

He does not have to go out to buy nice used stock because customers deliver them to his forecourt, giving him two bites of the cherry. The importation of new cars is not going to go away and consequently the concerns we have previously voiced still stand. If vehicles can still be offered at substantial savings over domestic new cars then this can only add to the pressures on our own nearly-new market.

Martin Ward, CAP Network national research manager

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