Vehicle valuation supplier and consultancy CAP Automotive has said a recovery in the German car market may herald the end of cheaper new cars in the UK.

CAP attributed the 16.71% rise in UK private sales (year-on-year for the nine months to September as recorded by the Society of Motor Manufacturers and Traders) to an ‘unprecedented’ level of retail deals from manufacturers attracted to the only major European new-car market to witness rising sales volumes.

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However, Dylan Setterfield, senior forecasting editor at CAP Automotive and appointed from GE Capital Fleet Services at the start of the year, has said renewed new-car demand in Germany may see brands switch supplies to that market, where CAP has estimated pent-up purchasing is equivalent to 400,000 new cars.

Turning die Ecke

"The signs are that recovery is already beginning to happen in Germany in particular," said Setterfield.

"We tracked a stable used car market in Germany during June and July and then a usually predictable drop-off in demand and prices during August failed to materialise. This kind of behaviour in the used market is often a precursor to improvements in new car sales.

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"And new car registrations there also look to be turning a corner. September’s year-on-year registration figures were only down 1.2% compared with 5.5% in August and many observers are now expecting a return to registration growth by the end of the year."

Improving markets

Despite the relative immunity of the UK new car market to the global recession, exchange rates continue to dampen the profits for international brands selling in the UK: According to CAP, the average list price of a new car in the UK is £25,425, worth €29,646 in September 2013, €2,440 less than a year before.

Toward the start of the year, both CAP and brands such as Vauxhall had warned of an influx of cars from manufacturers looking to make up for deflated sales performances on the continent.

Meanwhile, Kia Motors UK – among other improving markets for the brand – has spoken of the need to secure stock from its international manufacturer parent company.

richard.brown@timetric.com