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Reduction of VAT rate may have helped market during closing month of 2008
December marked the eighth consecutive month of decline for the new car market with just 108,691 registrations, according to the SMMT.
A glimmer of positive news for dealers in the figures was the 21.2 per cent year-on-year drop fell short of the 35 per cent fall predicted by the SMMT with the trade body speculating the cut in VAT at the beginning of the month could have been a contributory factor.
December’s fall pushed the new car market down by 11.3 per cent to 2.13 million sales, its lowest year-end since 1996.
The worst performing sectors were small businesses, running less than 25 cars, which fell 30.5 per cent to 6,571 units and private which tumbled 23.7 per cent to 38,967 units. The fleet sector, which accounted for 58 per cent of all sales in 2008, fell 18.5 per cent to 63,153 units.
Year-on-year diesel volumes fell for the first time since 1999 during the month although they took their highest ever market share of 43.6 per cent.
Most brands saw declines during December with major falls recorded by Chrysler (-75 per cent), Mitsubishi (-67 per cent), Subaru (65.2 per cent), Lexus (50.2 per cent), Cadillac (-50 per cent) and Renault (-46 per cent).
Only four brands increased year-on-year sales in December led by the revamped Ssangyong (+50 per cent), Smart (+33.5 per cent), Mazda (+9.4 per cent) and Hyundai (+1.9 per cent).
Once again the month’s best selling car was Ford’s new Fiesta while the Focus was the best seller for the tenth consecutive year.
Paul Everitt, the SMMT’s chief executive, said measures taken by the government to support the banking sector and kick-start demand have not yet been sufficient to restore consumer confidence.
“Further action to ease access to finance and credit across the economy is essential if long-term damage to valuable industrial capability is to be avoided,” he said.
“2009 will be another difficult year for the UK automotive industry with new vehicle registrations and production significantly reduced. The industry faces these challenges stronger and more resilient than in recent memory. The extraordinary circumstances we currently face mean that government support will be required to take advantage of global economic growth when it returns.”
His views were echoed by Sue Robinson, director of the RMIF’s National Franchised Dealers Association.
“Consumers want assurance from the government that jobs are secure, that disposable income will not decline further, that general economic conditions will start to improve, and that credit will become more generally available. Once this happens consumers will return to normal buying patterns,” she said.