Car sales reverse 30 month decline

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Car sales reverse 30 month decline

Post  Administrator on Thu Sep 15, 2011 9:23 am

Registrations of new cars grew by 7 per cent last month, marking their first rise in 14 months, the group representing carmakers said.

However, the Society of Motor Manufacturers and Traders said that the outlook for Britain’s car market remained “challenging”. August is traditionally the slowest month in the calendar for car sales.

According to the SMMT, 59,346 new cars were registered last month, the first year-on-year increase since June 2010.

Demand from private buyers rose by 11 per cent, the first time that that segment showed higher sales since June 2010. Registration of cars by fleet buyers continued to rise in August, up 5 per cent year-on-year.

Last year, August car registrations accounted for just 2.7 per cent of the annual total. September represented 17 per cent of the year’s sales.

“August represents a relatively small share of the new car market and the September new 61-plate registrations will be far more important for vehicle manufacturers and franchised dealers”, said Paul Everitt, SMMT chief executive.

Registrations of new vehicles for January to August have fallen by 6.1 per cent, or 79,795 units compared with a year ago.

“Given the downgrade in economic growth forecasts, the outlook for the new car market is set to remain challenging”, the SMMT said.

Analysts agreed with the group’s view that the September registration data would provide a more telling mirror of consumers’ propensity to buy new cars.

“The bad news”, wrote Howard Archer, chief UK and European economist with IHS Global Insight in a research note. was that the “future environment for car manufacturers has recently become even more worrying with the economy faltering, and consumer and business confidence weakening”.
However, David Raistrick, UK manufacturing leader at Deloitte, said that he expected another year-on-year rise in registrations next month.

Mr Raistrick pointed to factors including new car models coming on stream, interest rates remaining low and a “tipping point” having been reached as private consumers who had been deferring purchases of cars decided it now made sense to buy new ones.

“Looking to the future, our forecast is for a good September with a rise over last year”, he said.

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