New car sales takes a hit as consumer confidence weakens
Author: Robin Brown
Published: 07 August 2008
The Society of Motoring Manufacturers and Traders (SMMT) has released figures for July that show the automotive sector slowing considerably, with new-car sales down 13 per cent over the month - the steepest monthly decline since December 2006. Year-to-date figures show that the market has declined by three per cent compared to 2007.
July marks the third successive month of falling sales, with volumes down 7.4 per cent since April. The July total is down by 13.4 per cent on the 1997-2007 average for car sales in the month.
As a result of the figures SMMT is predicting a 6.6 per cent decline in volumes for the second half of 2008, while forecasts for 2009 have been revised down due to fears the economic conditions will continue in next year.
SMMT chief executive Paul Everitt blamed prevailing economic conditions and rises in the cost of living for decreased consumer confidence, which has impacted heavily on expensive purchases such as new vehicles.
“Vehicle manufacturers are doing their bit to support consumers, said Everitt. "New cars are now 22% more affordable than they were ten years ago and new technology is delivering more fuel efficient motoring.
"Industry needs the support of government in order to encourage the uptake of lower-emitting vehicles and ultimately lower the cost of motoring for consumers.”
Sales types
Sales of all types were down in July, with the drop in private sales during July the steepest since February 2005. Fleet volumes had remained more impervious to conditions so far this year, but declined during July by 7.3 per cent. Business sales were down 36.3 per cent in July.
Fuel types
While the market share for diesel models rose to 44.3 per cent, diesel sales fell in July by 6.4 per cent. Demand for alternatively-fuelled vehicles bucked market trends and rose by 19.4% in July.
Manufacturers and models
Ford took top manufacturer spot in July with an 8.5% rise in volumes, while the Focus hatch was top of the charts. The Focus just beat the Fiesta to be the number one best seller in July. VW Golf’s was the best selling diesel in both July and over the year-to-date.
BMW, Kia, Nissan, and Volvo have seen the best gains over the year-to-date. Some higher-end manufacturers have struggled in the UK over 2008. The likes of Aston Martin, Bentley, Corvette, Lexus, Jeep, Land Rover, Porsche and Saab have all seen sales take a hit over 2008.
Budget Asian manufacturers Perodua, Proton and Ssangyong have all seen significant falls in 2008. Small-car manufacturers smart and Daihatsu have had successful 2008s.
In segments, only the supermini and executive segments posted growth in July.
Economic analysis
GDP growth in 2008 was expected to be above 2.25%, but forecasts have been cut to just 1.6% currently. A more rapid cut to growth prospects in 2009 has taken place.
Consumer confidence surveys show similar results, as the credit crunch, weaker housing market and high inflation hits. These impacts are now clearly impacting on new car demand.
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