Fleet News

Niche sectors shine in new residuals league

A REPORT into used car values finds traditional fleet sectors are suffering, but fleet decision-makers should avoid suddenly changing policies.

A new residual performance league has charted the rise and fall of three-year-old cars over the past three years.

It reveals that niche sectors such as coupes, cabriolets and SUVs occupy the top spots, with traditional fleet sectors filling the lower ranks. However, staking all on the continued health of niche models is not the best policy, warns report author Glass's Information Services.

It claims: 'The past year has shown that the high residuals of niche products can only be eroded as more manufacturers introduce more models into these sectors.'

The supermini sector is now ranked 10th, up one place from three years ago, but residual percentages are down 0.6%. Glass's does not expect this to improve. It claims that high volume and the easing back of entry-level pricing impacts on residuals and makes the continuing gentle drop in prices difficult to reverse.

While the lower-medium sector, populated by massive volume cars such as the Vauxhall Astra and Ford Focus, has dropped in value by an average of 1.5% over the past three years, its near neighbour, the upper-medium sector, has seen a residual improvement of about 1%.

Glass's calls this surprising, but adds that the volume in the sector was higher than it is now while demand for the cars was falling away at an even faster rate than it is today.

The secondhand market for large cars with non-premium badges continues to be as lukewarm as it was in 2000, with buyers not wanting to be saddled with the high maintenance expenses and heavy fuel bills.

Volume car makers still cast a fond eye on the area. Toyota has launched the Camry, while last year Renault entered with the Vel Satis and Skoda with the Superb. Among the success stories, 4x4s have been performing well. Glass's added: 'The growth in the market can largely be attributed to families wanting a second vehicle to transport their offspring. Often mileage is so low that fuel consumption becomes a lesser issue. This goes hand-in-hand with perceived safety.'

The desirability of top coupes continues to improve, as does the full-size MPV market where versatility and their attractiveness as a second car for a family keeps values strong. The compact MPV market has no figures for 2000, as the sector was not developed enough to bear comparison. Two years ago, however, Glass's reports it was in sixth place, although the first wave of large numbers about to enter the market this year from fleets could see performance suffer.

Mainstream brand coupes fared disastrously, dropping 10.6%. With the Ford Puma no longer built, the Peugeot 406 Coupe, Vauxhall Astra Coupe and Toyota Celica hold up the sector, but demand in the secondhand market is low for other models.

Top RV performers
Sector Model example 2003 Avg RV % 2003 Rank 2000 Avg RV % 2000 Rank Change
Top coupes Audi TT 63.8% 1 57.2% 2 +6.6%
Top convertibles BMW 3-series 62.0% 2 66.7% 1 -4.7%
Convertibles MGF 51.2% 3 54.2% 3 -3.0%
SUV Toyota RAV4 49.1% 4 44.1% 9 +5.0%
Compact MPV Citroen Picasso 48.5% 5 - - -
4x4 Land Rover Discovery 47.4% 6 44.7% 8 +2.4%
Premium upper medium Audi A4 47.1% 7 45.7% 6 +2.4%
Full MPVs SEAT Alhambra 45.8% 8= 45.5% 7 +0.3%
Premium large BMW 5-series 45.8% 8= 53.0% 4 -7.2%
Supermini Nissan Micra 41.5% 10 42.1% 11 -0.6%
Coupes Ford Puma 40.7% 11 51.3% 5 -10.6%
Luxury Mercedes S-class 38.8% 12 43.4% 10 -4.6%
Lower-medium Vauxhall Astra 37.6% 13 39.1% 12 -1.5%
Upper-medium Ford Mondeo 34.6% 14 33.7% 14 +0.9%
Large car Vauxhall Omega 31.3% 15 34.1% 13 -2.8%

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