A combination of higher tax on company cars and a post-scrappage drop in demand for new cars will see a number of manufacturers decreasing prices in the form of new, lower specification levels to offset the difference.
Glass’s claim car makers will shift their attention from private buyers to the commercial fleet market now the scrappage scheme has ended.
However, Adrian Rushmore, Managing Editor at Glass’s. "List prices rose by an average six per cent last year, with some model lines increasing by more than twice this amount, and this has made many vehicles less attractive for those business users that will have to pay higher rates of Benefit in Kind tax."
Higher rates of Benefit in Kind taxes mean business buyers will shop around for lower list prices in 2010, causing many manufacturers to follow Vauxhall’s lead by introducing a new trim level.
The Expression trim reduces prices of many models in the Vauxhall range by more than £3,000.An ES trim was also introduced for the Vauxhall Astra line-up, reducing prices while maintaining the same level of equipment.
However, Glass’s has warned manufacturers the lower specification levels may be unpopular.
Rushmore said: "Low specification variants of fleet cars – especially those in the lower-medium and upper-medium segments – have limited popularity on the new and used market."
Manufacturers will have more success, says Rushmore, if it can stress the ‘green credentials’ and tax benefits of the models.
Despite the prediction, Kia, Skoda and Toyota have so far not introduced a new trim level, instead opting for a swappage scheme to offset any fall in demand after the end of the scrappage scheme.
It remains to be seen which manufacturers, if any, decide to offer a new entry-level trim level to increase sales.