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Buoyant new car market poses risks for fleet used car sales, warns KPMG

The SMMT’s latest figures reveal that UK car sales rose by 11.5% in January 2013, with private sales up by 15.9% while fleet registrations were up 6.0% to 75,211 units and registrations within the sub-25 business sector rose 40.4% to 7,357 units.

In response, John Leech, UK head of automotive at KPMG, warns that the used sector may be impacted by the buouyant new car market in the UK.

He explains: ‘The picture is very different across the English Channel. Germany saw new car sales drop 9%, France saw a 15% drop and Italy an 18% drop in January 2013. Car companies are therefore targeting the comparatively buoyant car market in the UK, with larger than normal discounts to keep factories busy.

‘It also reflects a return to the new car market by customers who had switched to used cars during the recession.  This may soon impact the UK’s used car market which has been booming and enjoying record high prices.  Dealers and fleet managers need to take care that there may be a downwards price realignment in the used car market in 2013. I believe prices could potentially fall by as much as 5% over the next 12 months.’ 

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.