gold book forecast changes for the MPV, Convertible, and Coupe Cabriolet sectors
Customers who take our gold book residual value forecasting product, will see new forecasts in August for the MPV, Convertible, and Coupe Cabriolet sectors. These forecasts will be based on revised future market deflation assumptions for these sectors.
These sector reviews are the third of a 5 month cycle in which we will revise our sector and fuel type future market deflation assumptions, based on our latest forecasts for new car registration volumes, the latest UK economic forecasts, and our expectations for the future market dynamics of different fuel types. Collectively these will determine the balance of used car supply and demand, which drives future market deflation/inflation.
In the MPV sector we consider that over the next five years, overall registration volumes will continue to decline with customers moving primarily into similar size SUVS, and manufacturers replacing MPVs with SUVs. There will continue to be an overall shift from diesel into petrol, especially for the smaller MPVs. Used supply will reduce in future years, but we expect used demand will remain quite strong especially those models with 7 seats. The balance of supply and demand will tip in favour of less deflation, especially for petrol models. The resulting changes in our deflation assumptions at 36/60k are as follows:
MPV Diesel: +1.6% improvement (less deflation)
MPV Petrol: +3.0% improvement (less deflation)
In the Convertible sector we consider that over the next five years, overall registration volumes will continue to decline and there will continue to be a shift from diesel into petrol. Future used demand will continue to broadly balance the change in used supply for both fuel types; with the scales tipping in favour of less deflation for petrol models. The resulting changes in our deflation assumptions at 36/60k are as follows:
Convertible Diesel: no change (our existing assumption was considered suitably conservative)
Coupe Cabriolet Petrol: +3.2% improvement (less deflation)
The Coupe Cabriolet sector now comprises of only three model ranges, and we consider it appropriate to now use the same deflation assumptions as the Convertible sector. The resulting changes in our deflation assumptions at 36/60k are as follows:
Coupe Cabriolet Diesel: -1.2% deterioration (more deflation)