Stronger used values for new models introduced in 2000 have given residual values in most European countries a strong start to 2004.

The latest EurotaxGlass's Fleet index shows that average values in January 2004 were 2.3% higher than 12 months ago and 5.2% higher than in October 2003. The index measures three-year trade values for approximately 40 benchmark models, which are important for the fleet market.

Values in the Upper Medium segment increased most strongly, driven largely by new model introductions. In particular, Mondeo and Laguna were launched in late 2000 and are performing much better than their predecessors

All markets with the exception of Portugal are now showing positive trends. Although values historically increase at the start of each year, there have been particularly large increases in many markets over last quarter. Belgium saw a large increase (+8.1%) confirming the signs of a recovery shown last quarter. Spain is showing largest year on year increase (+7.6%) of all the major markets.

Values in Austria, Germany, Netherlands and Switzerland continue to show positive trends, although with smaller increases. In the UK, the latest figures indicate that the period of decline is at an end and values are now increasing. The UK also saw a large rise in the average depreciation figure, from 34% to 39%, because of substantial reductions in new car prices three years ago.

12-month trend figures are currently not available for France and Italy due to a change in the way EurotaxGlass's measures residual values in these countries. Values in both countries increased significantly (10.3% in France and 3.0% in Italy) over the previous quarter. In Eastern Europe, values in Poland and Hungary continue to surge ahead.

In the Small segment, diesel models continue to perform better than petrol models - values for all models included in the index except the Corsa and Ibiza increasing.

Although values in the Upper Medium Segment have jumped, values for Lower Medium models continue to increase only gradually. In the Executive segment, EurotaxGlass's says the popularity of diesel models continues to decline, with stronger increases for petrol models.

Average prices for three-year-old used cars in the UK rose by 6.1% over the 12 months to January 2004. However, the residual value trend in the UK in the three months from October 2003 to January 2004 was for prices to rise more strongly, by 7.4% compared to the previous quarter.

The EurotaxGlass's European Fleet Index also compares residual values for each country against the average three-year residual value for all the euro currency countries. Residual values in the UK are 4% higher than the euro currency zone average.

Overall, in the third quarter of 2003, diesel cars in the UK retained 41% of their original value after three years, up 5.6% compared to the second quarter. Petrol models retained 39% of their original price, up 5.35% compared to the second quarter. Over Western Europe as a whole, the average car in the EurotaxGlass's Fleet Index retains 43% of its original value. Diesels overall retain 46% and petrol variants retain 40%.

Again, there are wide variations across the 12 markets. Switzerland suffers the worst depreciation, with three-year-old cars holding on to only 37% of their original price. Hungary has the lowest depreciation, cars retaining 56% of their value after three years.