Fleet News

Diesel residuals – it's all in the badge

'ONE of the key questions interesting fleet operators currently is the fate of all those diesels originally registered to take advantage of the CO2-based benefit-in-kind rules.

Used diesels continue to outperform their petrol counterparts by a considerable margin. This is partly due to the strong demand for new generation diesels, along with the fact that used diesels remain relatively scarce.

However, this year will bring increased numbers into the used market. Key to their ongoing performance will be the retail buyer's perception of the benefits of the fuel.

We are currently engaged in a major research project to gauge current retail demand for diesel and look forward to reporting the results.

The growth of diesel has resulted in a parc representing about a third of all new registrations – roughly doubling since 2000. Of course, the success or otherwise of diesels in the used market will be largely determined by buyers' perceptions of individual models.

For example, Peugeot and Citroen have very strong reputations and our research has revealed that in the private market, nearly half of their new sales are diesel. But the PSA Group does not have it all its own way and the German brands also enjoy massive success in this area.

We found that about 40% of new of Volkswagen and Audi cars registered to private buyers are now diesel. Brand perception is clearly all important because, despite carrying the same engine range as Volkswagen, our research indicated that only one in 10 SEAT sales are diesel.

This drops to less than 1% in the case of some Japanese brands and any survey of demand immediately reveals that diesel success currently belongs to the German and French manufacturers. But our research does also show that between five and 15% diesel uptake is also achieved by other high volume mainstream marques.

The reason why this matters to the disposal manager is that in the used marketplace success is very much related to brand perceptions.

In the new market there is a wealth of technical information on fuel consumption and general performance. Buyers or choosers are inundated with information. But when a car reaches the used market the most important piece of information for the buyer is the badge. Reputation then counts for everything.

So, given that it is easy to ascertain who enjoys the best reputations for diesels today, does this mean that the usual suspects will also do best in the used market?

The answer is yes. Although reputations can change, they rarely change quickly.

It is inevitable that there will be winners and losers in tomorrow's used diesel market. Judging which will fall on each side of the fence requires little more than a glance at the ongoing monthly registration figures and fuel type splits.'

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