24 August 2007

Trading conditions reported in the latest edition of Manheim Market Analysis show the volumes of dealer part-exchanges to be fairly static, but with some seasonal pressure on values in the second quarter of 2007.

This reflects the general market activity which sees the total number of used car transactions in the UK during the first 6 months of 2007 almost identical to last year at 3.89million. With the new car market in the same period up by 2.4% against 2006, Manheim believes that used car activity will continue to be a principal focus for the remainder of 2007, increasingly driving dealer's profits.

The report includes a highly topical Special Feature which looks at dealer part exchanges in each of the main vehicle segments and contrasts their sales performance by fuel type. Although the overall volume of part-exchanges is heavily weighted towards petrol models, representing 84% against 16% for diesels, Manheim says that dealers need to be aware of just how desirable their older diesels models are.

The fairly low diesel content clearly reflects the new car market of some 6 years ago but is in stark contrast to the mix of diesel coming to market from the younger fleet sector which is now sitting at 46%. This of course means the content of diesels coming back in part-exchange will grow significantly in the next couple of years.

Despite some recent worries that diesel prices are under severe pressure, Manheim's report clearly shows that in virtually all of the main categories diesel models are performing well. With the exception of Superminis, diesel prices are out-performing petrol cars, in some cases by quite some margin. However, this should be seen in context of the varying age/mileage between the fuel types.

Petrol/Diesel prices by Sector 2007 ytd. Table supplied by Manheim

Some headlines from the study include:

• Average diesel values are £3,452 against petrol models at £1,980
• Average age/mileage is 90 months/68K miles for petrol and 77 months/85K miles for diesel
• In the main volume segments, average diesel prices for Small Hatchbacks (27% of total cars including Fiesta, Corsa, Punto) are around £380 more than petrol cars, with Medium Family (31% of total cars including Focus, Astra, Golf) averaging over £870 more and Large Family diesels (17% of total cars including Mondeo, Vectra, Passat) at £1220 more than petrol cars.Commenting on the findings, Manheim’s Group Communications Director Rob Barr said 'It’s clear that while the volume of diesel part exchanges coming back from the dealer sector is still relatively low today, this is set to increase. Our research shows that more retail motorists are actively seeking out used diesel models across the price spectrum, as they understand the inherent fuel consumption benefits and longevity that diesels offer. Fortunately, the demand in the market seems to be moving in line with the increased supply of used diesels particularly at the higher-value end and this is keeping prices across the board relatively strong.”

For more information see: www.manheim.co.uk