Fleet News

Fall in residuals hits key fleet segments

KEY fleet sectors have been hardest hit by widespread falls in European residual values over the past year.

The latest pan-European residual figures - revealed exclusively in this issue of Fleet News Europe and provided by eurotaxGlass's - show prices are slumping fastest in the upper medium, lower medium and diesel segments.

But there's good news for premium brands. Strong used values for manufacturers like BMW, Audi and Mercedes-Benz - and for the executive segment in general - prove that volume brands are continuing to lose ground in Europe's second-hand markets.

'In the upper medium segment there is a clear divide between the premium models, like the Audi A4, BMW 3-series and Mercedes-Benz C-class, which are nearly all showing increases, and the volume models, which are all experiencing declining values - particularly the Renault Laguna, Peugeot 406 and Nissan Primera,' said Rick Yarrow, managing director of eurocarprice.com which compiled the study on behalf of eurotaxGlass's.

'Although diesels have consistently achieved lower depreciation rates than petrol models, the gap is narrowing with average diesel values declining by 2.3% compared to 0.9% for petrol models,' he added.

The figures measure residual performance in the year to October 2001. They cover trade values of 40 key three-year-old models across all the major fleet sectors in 13 countries. Based on eurotaxGlass's values taken last month, an average vehicle is currently worth 38.4% of its original price compared to 39.6% in October 2000. Citroen Xsara residuals are falling faster than any other model - diesel and petrol Xsaras have slumped by 9.1% and 7.8% respectively.

Of the four main fleet market sectors (small, lower medium, upper medium and executive) only executive cars are improving values. The average value of an executive saloon has strengthened dramatically since some of the volume manufacturers - such as Ford and Renault - lost interest in the sector.

Only four markets have seen average three-year-old car prices grow over the past year: Belgium, the Czech Republic, Germany and the Netherlands. Of these, only Germany has registered growth over the last quarter. But eurotaxGlass's expert Hubert Jung said high used prices in Germany were not an accurate sign of the market. Jung said demand was weakening and would force residuals down by next spring. (November 2001)

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