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Used car analysiscar market is likely to display similar threats and opportunities as last year and probably repre­sents the new norm for the next few years.Market Trendn New car registrationsThe SMMT reported that new car registrations fell by 4.2% in November to 134,027 units. The most notable feature of the figures continues to be the lacklustre performance of the private sector. Year-to-date, private registrations were down 14.1% compared to the total market that is down 4.5%. In November, the private element of total registrations was down even further, at 15.7%.If registrations in December amounted to the average of the previous three Decembers (i.e. the recessionary years) the total for the year will be a handful of units short of 1.95 million. This would be a loss of 81,000 units from 2010, or 4%, and it would also be the lowest total this millennium.n Used car salesRetail activity fell into the doldrums during the first few days of December. For some dealers this point was reached during the second half of November. Either way, it was difficult to deter­mine whether this pattern of declining retail sales was consistent with the time of year, or repre­sented a slightly depressed state of affairs. All that we could conclude was that dealers were left feeling a little disappointed especially as profit margins continued to be very slender.n Wholesale marketEven though auction conversion rates continued to ease back to the end of the first week in December, vendors were still satisfied with the results. For dealers selling unwanted part-exchanges, prices were still higher than stand-in values, something that is never guaranteed during late November and early December. Compared to the same time in the previous year, conversion rates were several percentage points higher. The other positive aspect of the market was that bids were also being logged for the poorer condi­tion cars, when in a slow market these are the cars that would be met with complete dis- interest. 4x4s continued to be the height of desir­ability with prices nudging up still further. It is hoped, for the sake of the many dealers who have invested in this type of stock that the bad weather arrives soon.During the second week in December we detected a turning point in activity. This was largely inspired by a growing band of dealers who felt the need to restock for the post-Christmas period. Up until this point, most of the buying activity was concentrated on replacing gaps on retail forecourts. It has been quite noticeable that the amount of speculative buying activity was more muted at the tail end of last year and this has much to do with the uncertainty of the retail market, the fact that nobody has been able to buy cheap cars, and because existing dealer stocks have not fallen too low.n Trade pricesSurprisingly, auction prices were little changed at Demand has helped nudge up prices of 4x4s

New car marketNewsNewsdigestShowroomAMAwardsNew carnewsAM IndexRecruitmentthe end of November compared to October. Dealer part-exchange cars (over 4.5 years) improved by 1%, while fleet cars (2.6 to 4.5 years) only reduced by 1%. This slight movement in prices is at odds with the price drops of recent years. Taking fleet cars as an example, the average rate of price fall between October and November for the last five years was in excess of 3%. The difficult retail conditions experienced by dealers in recent months would suggest that prices should have fallen more in line with this five year average. In reality, dealers have been very successful in maintaining their sales volumes in line with targets, even if this has been at the expense of profit margins. But if sales volumes are being maintained, there is an ongoing requirement to source cars from the wholesale market - especially when part-exchanges are fewer. Auction supply could not be described as plentiful, and with healthy competi-tion between bidders, prices were not going to fall heavily. This was in spite of the fact that buyers were conscious that buying prices needed to be low in order to try and recover some lost profit margins from those cars purchased on previous occasions.ProspectsThe likely starting position for the New Year is that dealer stocks will be in the number and mix that was planned prior to Christmas. The 'carry-over' of auction supply will probably be little different from the previous year. There are likely to be some additional cars that vendors would have deliberately held back from the auction halls just before Christmas, but this should not add significantly to the overall volumes, although it will help to stimulate buyer interest. As with the start of any year, the degree of buying activity, and the increase in prices is almost entirely dependent on trade buyer confidence because retail customers do not come out of hibernation until early spring. The other factor to consider is that prices in the final quarter of 2011 were unusually robust. The average price of all cars at the end of December was forecast to be £4,750, some 3.5% higher than a year earlier. On the basis that trade confidence will not be particularly high, and that prices will also be at a higher starting point, common sense suggests that there may not be a large spike in prices during the month. Last January, we witnessed a very marked spike in demand and prices, mainly because dealers had been prevented from replenishing stocks during early December due to severe weather conditions. Assuming that the bad weather did not return, the feeling is that this spike - which amounted to 5% for fleet cars - will be less pronounced this January. Guide valuesGuide values, have for the most part, increased by around 2%. Some would argue that this is quite a modest uplift, but on balance we would rather have underestimated any improvement. An overestimation would require the dropping of values for February which we would want to avoid.Disappointingly, but not surprisingly, Saab values continue to fall back, this month in the region of 2% to 5%. Our observation is that they now look very good value for money, but as always, the market will be the final arbiter.'Common sense suggests that there may not be a large spike in prices during January'Adrian Rushmore, Glass's