UK new car registrations rose 12.1% to 151,252 units in October, bucking current demand trends in Europe, says the SMMT, but Deloitte warns that the UK is likely to follow the same path as all major European markets in 2013.
The Society of Motor Manufacturers and Traders latest figures show that the market for new cars in the UK is still resilient. The automotive sector organisation has revised its production forecast for the 2012 to over two million units.
New car registrations rose over 12% in October, to more than 150,000 new cars purchased, with demand up across the different fuel types.
The market has increased 5% over the year-to-date, growing in all but one month, totalling 1,771,861 units. This represents an increase of 83,823 units on a year ago.
Petrol, diesel and alternatively-fuelled vehicle markets posted strong growth in the month and over the year-to-date, with most vehicle segments growing as well, notably small car and dual purpose segments.
SMMT has revised up its forecast for the full year to over two million units, from 1.94 million in 2011.
“Despite uncertainty in the European economy, the UK new car market continues to grow, with registrations rising more than 12% in October to 151,252 units,” said Paul Everitt, the SMMT’s chief executive. “It is encouraging to see the alternatively-fuelled vehicle market performing strongly, up 13% so far this year.
“Although the alternatively-fuelled vehicle sector represents only a small share of the overall market, it is vital that government sustains its consumer incentive programme and maximises the benefits available through the vehicle taxation system.”
David Raistrick, head of UK manufacturing leader at Deloitte, said that Germany will be concerned at the fall in demand in such an automotive stronghold. He also warned that the UK figures include many pre-registrations which are not sustainable long term, and Britain will follow Europe’s lead as the slowdown percolates into UK car production.
“A number of major UK dealer groups have reported strong sales growth in 2012, but their counterparts in Europe are witnessing a decline,” he said. “This is particularly uncharacteristic in Germany, where a double digit contraction in September 2012 for new cars and a 2% reduction overall for the year will instigate some very serious dialogue in the boardroom.”
Mr Raistrick added: “Commentators continue to point toward the Chinese market as a key growth area for manufacturers but have neglected the fact that the majority of cars sold there are manufactured in China itself. Of the 14.5 million new cars sold in China in 2011, 832,000 (less than 6%) were imported.”
Most of the major auto manufacturers have at least one production facility in China, mostly operating as joint ventures with Chinese automotive manufacturers, Raistrick added.
But he warns that while growth is strong this quarter, the UK cannot fail to follow the path of European demand.
“While UK new registrations are likely to end the year at just over 1.9 million and on the surface appear strong, it is important to also look at the huge decline across every other European market. The UK figures include substantial numbers of both pre-registrations and manufacturer early registrations, which are not sustainable in the longer term.
“Stripping these out would show a very different picture in the UK. While the vehicle registrations for the next couple of months are fairly cast in stone, there is now a real risk that the UK could head in a similar direction to every other major European market during 2013.