Manheim fuels the petrol/diesel debate

In its latest edition of Market Analysis, Manheim has included a very topical review of the fleet market’s used car sales for 2007 to date shown by the main vehicle segments versus fuel type. Each of the 8 segments is split into residual value performance for both diesel and petrol models.

Diesel variants now account for 46% of all fleet vehicles coming into the used market. Remembering this reflects new fleet registrations three years ago, the figure substantially exceeds the current new car diesel market which is running at 39% of total market registrations in the first half of 2007. This figure emphasises just how much more popular diesels are with the corporate sector against the private motorist’s new car choice.

Despite recent worrying reports that diesel prices are under severe pressure, Manheim’s report clearly shows that in most of the main categories they are performing well.

Some quite stark contrasts can be seen in the relative age and mileage between diesel and petrol models. The average for all fleet vehicles sold by Manheim in 2007 to date shows petrol variants at 44 months/42K miles whilst diesel models are 5 months younger at 39 months, but having covered substantially more miles at 65K miles on average.

This pattern of diesels being generally younger, but with significantly higher mileage, is reflected across the study with some notable extremes. For example, Small Hatchbacks (which include Fiestas, Corsas, MINIs, Clios) show a similar average age at 40 months, but with diesels models having covered 18K more miles at a total of 48K miles on average. The ‘work-horse’ segments of Medium family (Focus, Astra, Golf, 307) and Large Family (Mondeo, Vectra, Laguna, Passat) illustrate the differing uses of these segments.

The mileage gap in Medium Family models is a staggering 20K miles with petrol models having covered only 39K miles on average (at 43 months), whilst diesel variants record just short of 60K miles at 4 months younger (39 months).

Age is the real contrast in the Large Family segment with diesel models coming off fleet at an average of 40 months (at 73K miles) whilst their petrol counterparts stay in service for 9 months longer, de-fleeting at 49 months (at 63K miles). 65% of all Large Family cars coming from the fleet sector are diesel-powered, the highest of all segments.

The most notable difference in age remains in the Executive segment. With almost identical average mileages covered by both petrol and diesel models at 72 K miles each, Executive diesels come to market 20 months earlier at 39 months contrasted to petrol models at 59 months. The Executive segment records the second highest content of diesel models currently running at 61%.

Fleet operators also should look closely at the relative price performance between the fuel types in each of the main volume segments. These range from the worst performer being Large Family petrol models, sitting at £4065, only 25% of original Cost New Price (at 49 months/63K miles) to the highest performer which are Compact Executive diesel models averaging an impressive £9,111 or 42% of cost New (at 38 months / 67K miles).

Commenting on the findings, Manheim’s Group Communications Director Rob Barr said: “It’s clear that while the volume of diesels coming back from the fleet sector is increasing, prices are still holding up.”

“Our research shows that more retail motorists are actively seeking out used diesel models as they understand the inherent fuel consumption benefits and longevity that diesels offer. The diesel technology is also so much more refined than it was a few years ago. Fortunately, market demand seems to be moving in line with the increased supply of used diesels, particularly from the fleet sector, which is keeping prices relatively strong.”