Fleet News

Experts allay fears of residual crash

USED car experts are allaying fears that strong fleet sales achieved at the beginning of this year could impact on residual values.

Latest figures show that new fleet car registrations totalled 85,178 units in January, up 9% on the same month last year and with a market share of 43.1%.

Business registrations, those to sub-25 fleets, also grew and were up by 7.2% at 23,906 units, figures produced by the Society of Motor Manufacturers and Traders (SMMT) show.

An SMMT spokesman said: 'Solid fleet and business registrations led January's impressive market growth.'

This growth comes soon after figures showed annual fleet sales were the second highest on record last year, topping one million for the seventh year running (Fleet NewsNet, January 15).

But experts say the market will be able to cope when the need arises if fleet sales were to carry on growing throughout the year.

Fleet News columnist and CAP national research manager Martin Ward said: 'It's impressive growth but spread across a range of cars it shouldn't have too much of an effect on residual values. I believe the market will cope with an increase so fleets should not worry.'

BCA's director of customer affairs, Tom Madden, said: 'Our experience shows that throughout 2003, average used car prices from the fleet and lease sector remained steady, unaffected by a bullish new car market. In the first quarter 2003, a three-year-old car at 62,000 miles averaged £5,676, while over the fourth quarter 2003, product at a similar age and mileage averaged £5,634. With sample sizes running into the thousands of vehicles, this is certainly robust data.

'The whole year was demand-led and the prices achieved reinforced the fact that fleet cars remain the most desirable 'product sector' available in the used market. Volume only becomes an issue where there is poor inventory management and weak remarketing strategies.'

Total new car sales, including those to private buyers, increased 5.8% to 197,591 units in January and diesel cars took a record market share, accounting for 31.2% of all registrations. It marked the 40th consecutive month that diesel sales rose and represented a 20.9% increase on the same month last year, at 61,706 units.

SMMT chief executive Christopher Macgowan said: 'January's new car market continues a trend set over three consecutive record years.

'Fears over interest rate rises are not affecting registrations which remain strong on the back of a positive economic backdrop and raft of attractive new models. We can expect 2004 to be another year in which the UK consolidates its position as the second largest European market.'

In terms of models, the Ford Focus remained the UK's best- selling car last month. The Ford Mondeo was the best- selling diesel.

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