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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

By Darren Kennedy, editor, CAP Black Book PlusDespite the anticipation of a strong New Year, December ended up quite flat, with many models performing below normal seasonal averages. In particular, the medium MPV sector saw consider­able reductions in values.Although anecdotal research was suggesting that there would be increased demand in the New Year, Black Book Plus took the view that demand would be insufficient to inject much life into the sector as buyers had already stocked up over the previous months, leaving an imbalance between supply and demand at the end of the year.Positive outlook for 2012Restricted supply of three-year-old cars points to healthy start to the yearUsed car analysisFor daily automotive news visit www.am-online.com/newsAlso of concern at the end of the year was the increased supply of late-plate vehicles. This raised the spectre of a ripple-down effect on values although it should be noted that this part of the market was clearly softening much more than the core three-year-old market. Our view has been that these high levels of forced registrations were not occurring across all sectors and that the impact would be limited to late-plate specific price points. In other words, nearly-new values are likely to continue weakening but this will not be translated directly into the three-year-old segment, where City carThe average price for a three-year-old vehicle has risen over the past year by 10%. Expect more stable values after February. SuperminiA strong first quarter performance will be due to the usual factors of practicality and economy keeping trade and retail demand firm. Lower mediumThis sector will benefit from the registration downturn of 2009. Consequently, first quarter performance will see rising values. Mini MPVDue to the unpredictability in stock returning to market, the first quarter outlook is generally positive, but edged with some caution. Medium MPVThe thirst for increasingly cost-effective vehicles is starting to affect this sector. Core demand for this vehicle type will remain but values are unlikely to reflect any special strength. Large MPVThe gap is widening between this sector and medium MPV in the larger vehicle's favour. This means a positive start to the quarter.Upper mediumThis sector will benefit from restricted volume in the early part of the quarter. 4x4Following the phenomenal long-term increase in values, this sector is now considerably over trend, which suggests some corrections ahead.Outlook by sector