Car sales continue to slow

Posted on 6 Dec 2010 by The Manufacturer

Weak consumer demand for new cars in the UK continued in November, although sales were ahead of forecasts.

According to figures released today by the Society of Motor Manufacturers and Traders (SMMT), registrations of new cars fell by 11.5 per cent in November to just shy of 140,000 units. Analysts had predicted that figure would be lighter by around10,000. The fall is the fifth straight move of decline for the automotive industry.

Although registrations are expected to fall again this month, the final sales figures for 2009 are still to be around two per cnet and two million units higher than last year.

Sales of fleet vehicles are up fleet volumes, up 10.7% over the year to date.

Paul Everitt, SMMT Chief Executive warned: “Next year will continue to be challenging as consumer spending tightens and government’s austerity measures take effect.”

The market is forecast to fall by some 5% in 2011 to 1.93 million units, because of said austerity measures, beginning with the VAT rise in January, from 17.5 per cent to 20 per cent

David Raistrick, automotive partner at Deloitte, contends that the situation could be bleaker still.

“Today’s figures are a stark reminder of the challenges that lie ahead for the motor industry into 2011,” says David Raistrick, automotive partner at Deloitte. “I think it is unlikely that we will see a pre New Year rush from consumers looking to save the additional VAT which comes into force from 4 January, and I expect December’s figures to remain flat.

“As consumer and business confidence remains unsettled, it is doubtful that either private or business sales will grow in the New Year. I stand by my prediction that new vehicle sales for 2011 will be closer to the 1.8 million unit mark.”

The top selling car in the UK remains the Ford Fiesta.