Niche model additions to the market could result in falling residual values, according to vehicle data provider, Glass’s.
The data provider identified that while some models have added to consumers’ choice, some could be considered ‘oddball vehicles.’ Rupert Pontin, Glass’s head of valuations, highlighted that this may affect residual values.
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He said: "The question is whether all of these models add to choice and are understood by the consumer or are really just oddball vehicles that are neither particularly useful nor particularly desirable. Certainly, while we have seen some highly successful new niches recently, other models introduced over the last year appear to us to fall into the latter category and this may effect RV forecasts accordingly.
"Ironically, the C and D sector saloons that were once considered dull are now, in some cases, around in such small numbers that demand exceeds supply by some margin and they move quickly off forecourts," he added.
Over the past decade, manufacturers have been producing a range of new niches to attract consumers and differentiate from competition. Pontin emphasized the potential risk attached to these models becoming the new mainstream, as there may eventually be ‘too many niches to sustain.’
He said: "This can really be traced to the introduction of the Nissan Qashqai in 2006 when Nissan pulled out of the D sector with the halting of production of the Primera. The move was a huge success and, since then, we have seen a plethora of new niches – all kinds of soft-roaders, coupe-saloons, 4×4 coupes and more. At every motor show we see something different.
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By GlobalData"The danger is, we feel, that we are potentially at a point where there are simply too many niches to sustain. You only have to look at the ranges of the German prestige manufacturers, which are running to 20 or so separate models with multiple variants within each range and more planned, to see the potential that exists for confusion."
