According to Glass’s Information Services, armed conflict in the Middle East is unlikely to lead to a significant long-term downturn in sales of news cars, or cause a marked drop in used car values.
“If the UK is involved in any invasion of Iraq, many consumers are likely to delay any potential vehicle purchases so that they can see if their spending power will be affected in any way,” Glass’s senior car editor Jeff Paterson. “However, this lull in sales activity is unlikely to extend beyond a month or two.” Glass’s points out that a brief hiatus in sales would replicate the impact on the UK car market of both the first Gulf War in 1991 and the Falklands War in 1982.
Hostilities are widely expected to bump up fuel prices and Paterson reckons that more buyers will reject vehicles they perceive to be ‘gas-guzzlers’. “We can expect to see the acceleration of several established trends, such as falling sales for large petrol 4x4s and non-diesel executive cars, and the growth of fuel-efficient B and C sector vehicles and those powered by diesel engines.”
These changes to buying patterns will almost certainly be duplicated in sales of used cars. “Wider awareness of the refinement and economic benefits of modern diesels will ripple down even faster to the second-hand market, preventing any significant drop in values over the next few years, despite the marked increase in supply,” claimed Paterson.