European car makers selling in the United Kingdom are coming under pressure to cut the number of ‘special offers’ and discounts available for new vehicles as a direct result of the falling value of the pound sterling, used vehicle valuation specialist Glass’s Guide said.
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The euro has increased in value against the pound by about 17% since the end of 2002 and this is likely to force many manufacturers to either curtail promotional offers or increase the prices of their new cars, Glass’s claimed.
“We may well see some manufacturers retreating on offers now, and then return with bold new offers just prior to the introduction of the September [‘53’ registration] plate when the market is at its most active,” said Glass’s Information Services managing editor Adrian Rushmore.
Glass’s claimed out that if car makers increase the prices of their new stock, this alone is unlikely to counter recent accelerated rates of depreciation for many used cars. Added Rushmore: “Dealers have been pre-registering increasing volumes of new vehicles over recent months to boost their sales figures and so, with plenty of three-month-old examples now being pushed into the used market, there is unlikely to be any significant firming-up of values.”
The weakening of the pound has also meant new cars sold in the UK now appear much less expensive compared to those of a similar specification available in continental Europe. So-called ‘parallel imports’ – supposedly ‘UK-specification’ cars sourced in continental Europe – have consequently lost their price advantage and comparatively few are now entering the country, Glass’s said.
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