New car sales plunge to lowest in 22 years
publication date: Sep 5, 2008
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author/source: Robin Roberts
New car sales collapsed to a 22 year low last month.
The SMMT said that new car registrations were down 18.6pc to 63,225 compared with the same month in 2007.
It said that declining consumer confidence was hitting sales across all major European markets and called on the UK government to take "sustained action" to boost the economy and restore confidence.
"Industry is encouraged by the growing interest in lower-carbon cars, but is concerned by the reluctance of consumers to commit to major purchases," said chief executive Paul Everitt.
“There is a clear need for sustained action by government to boost the economy and restore confidence.”
As well as weaker consumer confidence, the high price of petrol has also been deterring buyers. The SMMT said that falling oil prices could help boost sales.
Diesel sales declined for a second successive month but their market share increased, with the VW Golf the best selling diesel model in August.
Vauxhall again topped the sales charts with 15.26pc of registrations compared to Ford on 12.49pc while VW was a distant third with 9.33pc. The most significant performances came from smart and Lotus who saw their sales soar over 700pc and nearly 300pc respectively in their specialist sectors.
Of the more mainstream makers, only Audi posted both increased share and sales.
Small cars generally saw registrations double and superminis accounted for a third of all sales, suggesting consumers are rapidly moving into more efficient and cheaper cars.
Predictions for the rest of the year from the SMMT indicated a decline by the end of 2008 of 5.9pc to 2.26M new cars, and for it to fall further in 2009 with 2.16M anticipated sales.
Business sales are down over a third and retail purchases are close to a quarter down in August, which is traditionally a slow month anyway as buyers hold off for the September plate.
The level of advance sales promotions for 58-plated cars suggests pre-orders are also tailing off and with car makers and dealers usually relying on good new plate sales to carry them through the winter it could be a very hard few months until buyers start thinking about the 09-plates due next March.
● Rarest sales in August were of Rover and Corvette models, which sold one of each, while Cadillacs went to two buyers, a similar number to those who bought Hummers.
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Top ten August 2008 Registrations
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1
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Vauxhall Corsa
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3,527
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2
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Ford Focus
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2,933
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3
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Vauxhall Astra
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2,535
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4
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Volkswagen Golf
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2,437
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5
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Ford Fiesta
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2,212
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6
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Vauxhall Zafira
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1,767
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7
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BMW 3 Series
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1,466
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8
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Citroen C4
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1,367
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9
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Ford Mondeo
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1,342
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10
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Peugeot 207
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1,326
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| The Bank of England has missed an opportunity to kick-start the economy, said Sue Robinson, Director of the RMI National Franchised Dealers Association. |
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Robinson added, “The cost of borrowing remains high, while household costs continue to increase.
The Bank of England has the ability to immediately boost the economy by reducing the interest rate, and would be wise to do so as soon as possible.
“A reduction in interest rates would help householders struggling with mortgage debt and other increasing household costs.
Hopefully this would increase disposable income that could then help boost the wider economy.”
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It is also looking bad in the commercial vehicle market.
“August is traditionally a month for low registrations. That, and the economic situation which is slowing spending, means a big drop in van figures,” said Paul Everitt.
“In the short term van registrations will continue to struggle, though the truck sector is holding total CV figures close to the three-year average. In the longer term we expect an overall and marked downward trend.”
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Motorists are still being hit by rises in petrol prices - even though oil is up to 27pc cheaper than in mid-July.
The failure of oil companies to pass on the dramatic drop has led to accusations of profiteering and rip-offs with unions, motoring groups and some politicians calling for windfall taxes on company profits.
Oil prices are now at their lowest for five months, yet the AA says that the average pump price of unleaded petrol has risen by 0.5p a litre to 112.72p since the end of last week. In recent weeks, the AA says that petrol prices have dropped by only 6pc.
The AA said an 18pc drop in the wholesale price of petrol has not been fully passed on. It calculates that this should have brought an 8.5p reduction in pump prices.
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