Specialised Cars Could Succumb To Higher Rates Of Depreciation

Ten years ago new cars could be easily defined by size and function and there was an obvious distinction between mass market and premium brands. However, these clear lines of demarcation are becoming increasingly blurred as manufacturers launch growing numbers of specialised niche vehicles, as well as ‘cross-over' models that blend characteristics of two or more sectors. This has helped fuel a 42 per cent increase in the number of new cars available in the UK over the past three years alone. According to EurotaxGlass’s, both new and used customers are likely to become progressively more confused by what some of these more specialised products offer, with negative implications for demand and residual values.

EurotaxGlass’s highlights a number of niche and cross-over vehicles where a lack of understanding about the benefits may already be affecting their residual value prospects. These include mini MPVs (e.g. Fiat Idea , Vauxhall Meriva, Renault Modus), larger volume-brand models (e.g. Vauxhall Signum ) and premium-brand 4x4 cross-over vehicles (e.g. Audi A6 Allroad, Volvo XC70 and Mercedes R-Class).

"The appeal for manufacturers is to create a new niche that has not been exploited before in the hope that they will be able to attract a new type of customer," comments Adrian Rushmore, Managing Editor at EurotaxGlass’s. "However, its is apparent that some models are failing to make their mark on the consciousness of the consumer. Until popular acceptance of the merits of some of these specialised new niche sectors improves, manufacturers may need to limit availability to avoid damaging falls in values."

4 October 2005 Staff

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