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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 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

New car marketNewsNewsdigestShowroomAMAwardsNew carnewsAM IndexRecruitmentsupply is expected to be more restricted.That said, Black Book Plus has taken a positive outlook for the beginning of 2012 due to the expected restriction of three-year-old supply. This is, of course, dependent on no dramatic reductions in demand. But the lesson of last year was that relative lack of supply will make up for the depressing effect of poor consumer confidence and we expect that balance to continue. Research indicates that the relative restrictions on stock seen during 2011 will grow in the early part of 2012. This is based on the fact that the slump in new registrations really began during the first quarter of 2009 with a 30% reduction on the same quarter in 2008. This was sparked largely as the business car sector extended contracts and reduced the number of new cars registered on to their fleets. This trend would continue throughout the year and therefore feeds through into a shortage of three-year-old cars returning in 2012. Clearly there will be other external economic factors that will play a part in the used car market-place. The overall effect of the Euro-zone crisis and the current austerity measures that are in place could all dampen retail activity. As we have seen before, however, there is not always an obvious corre-lation between the wider economy and performance in the used car market. What tends to happen is that different sectors are positively or negatively impacted by changes in economic circumstances rather than a single overall movement.'Relative lack of supply will make up for poor consumer confidence'????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????