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November 9, 2005

UK: New car price rises average 1.4% in October

The list price of the average new car sold in the United Kingdom rose by 1.4%, year-on-year, to the end of October 2005, equivalent to a rise of GBP182.

The list price of the average new car sold in the United Kingdom rose by 1.4%, year-on-year, to the end of October 2005, equivalent to a rise of GBP182.

The findings, published by EurotaxGlass’s in its monthly new car market trends report, point to a continued modest increase in new car prices, albeit at a rate that remains below that of UK inflation as a whole (the retail prices index is currently 2.5%).

The sector that has seen the greatest increases is the lower-medium sector (Ford Focus, Vauxhall Astra, etc), with an average list price rise of 3.2%, or GBP396, over the past 12 months.

At the other end of the spectrum, superminis (Vauxhall Corsa, Renault Clio, etc) have seen list price reductions of 1.4%, or GBP130, on the average car.

“Current low levels of list price inflation are particularly noteworthy given the continuous improvements being made to vehicle specifications, as well as the growing physical dimensions of new cars in most sectors,” noted EurotaxGlass’s editorial consultant Alan Cole. “Buyers are effectively getting more for less. However, demand is simply not strong enough to enable vehicle manufacturers to increase prices in response to rises in steel and energy costs.”

He added: “Dealers are caught between a rock and a hard place. Retained margins of 1% or less on the selling price of a new car are the order of the day, and new car profitability is still in decline. This all means there is very little room to offer further discounts on new cars and, with finance deals already very attractive, retailers have to be increasingly imaginative to secure consumer interest.”

There have been year-on-year list price increases at or above the 1.4% market average in the lower-medium (Ford Focus, Vauxhall Astra, etc), up 3.2%; upper-medium (Vauxhall [Opel] Vectra, Ford Mondeo, etc), up 3%; and large executive sectors (BMW 5 Series, Audi A6, etc), up 1.4%.

Below average rises, or falls in list prices have been seen in the compact MPV [minivan] (Renault Megane, VW Touran, etc), up 1.1%; large MPVs (Ford Galaxy, Renault Espace, etc), up 1.1%; compact executive (Audi A4, Mercedes C-Class, etc), up 0.2%; sports utility vehicle (Toyota RAV-4, Land Rover Freelander, etc), down 0.2%; and supermini (Vauxhall Corsa, Renault Clio, etc), down 1.4%.

The single largest list price rise during October was for the Lexus SC430 luxury coupe-cabriolet, which increased by GBP1,993 to GBP53,905.

The greatest list price fall was for the Toyota Corolla Verso 1.6 VVT-i T2 MPV, which was reduced GBP505 to GBP13,297.

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