Sales tumble in September as UK feels the pinch
Author: Robin Brown
Published: 07 October 2008
September car sales indicate a tumbling car market across the UK and Europe, as the impact of the credit crunch and global financial conditions impact on the automotive industry.
New car registrations were down 21.2 per cent in September 2008 compared to September 2007, while year-to-date figures are down 7.5 per cent, according to the Society for Motor Manufacturers and Traders.
The September figure was the lowest since the twice-yearly plate change system started in 1999, at 330,295. That amounts to a drop of 88,995 units compared to September 2007. Sales fell for five consecutive months between May and September.
The figures unsurprisingly prompted the industry to call on the government to ease pressure on the car market by scrapping plans to introduce increase in car tax. The SMMT Chief Executive Paul Everitt also called for more incentives for fuel-efficient vehicles.
SMMT believes that any upturn in the market will not be noticed until Q3 of 2009.
Sectors
Figures were down in September 08 across all sectors compared to the previous year. Business registrations were worst hit - down by over 37 per cent - while private sales fell 23.3 per cent and fleet sales by 16.1 per cent.
Private demand has fallen in every month of 2008, while business volumes have fallen by more than a third in the past three months.
Fuel types
Diesel volumes fell by 15.4 per cent compared to September 2007, though diesel market share grew from 39.4 per cent to 42.8 per cent.
Alternatively-fuelled vehicles volumes fell in September compared to Sep 07, though year-to-date figures are up and market share is also up between September 07 and September 08.
Manufacturers - winners and losers
The Vauxhall Corsa was the best-seller in September with 15,647 sales compared to the second-place Ford Fiesta with 13,316 sales, which is now on roll-out in preparation for the new model.
Year-to-date the perennially-popular Ford Focus is the biggest seller, with 86,112 sales.
September 07-08 figures reveal that very few manufacturers are up on last year's sales. Audi, Hummer, Jaguar and Smart were the only manufacturers to post increases, all by very small amounts.
Renault volumes were down by a massive 50 per cent, Alfa Romeo, Bentley, Cadillac, Chrysler, Jeep, Land Rover, Lexus, Proton, Saab, Seat, Ssangyong and Subaru figures all dropped by 40 per cent or more.
Year-to-date figures indicate heavily declining sales for Cadillac, Chrysler, Jeep, Land Rover, Lexus, Porsche, Proton, Renault, Saab, and Ssangyong.
Industry segments
Only the city car segment posted growth in September 08 compared to September 07. smart, the Hyundai i10 and Vauxhall Agila were all strong sellers in this segment.
Compared to the same month last year, sales of SUVs fell by 40.98 per cent, luxury models fell by 42.79 per cent and sales of supermini and small family cars - represented by the Ford Fiesta and Ford Focus respectively - fell by 22 per cent.
Commercial
Total van registrations have fallen by 13.8% in the last three months. Heavier commercial registrations have not yet been impacted but companies are reporting a rapid decline in new orders.
Analysis and reaction
SMMT blames higher oil prices for the slump in sales, but adds that a drop-off in inflation could lead to lower interest rates and falling costs.
SMMT says consumer confidence is in need of a boost if sales are to recover. A review of current plans to increase road tax and incentives for alternatively-fuelled vehicles would help, according to the organisation.
While there are no native volume car manufacturers in the UK, the country is host to nine major car makers and six commercial vehicle manufacturers producing 1.75m vehicles annually.
The recent downturn has led to several manufacturers in the UK cutting production, prompting fears for jobs in UK manufacturing.
The RMI National Franchised Dealers Association (NFDA) repeated its monthly call for lower interest rates.
"With consumer confidence at such a low ebb, September’s car sales figures are not a surprise in many respects. There is a real need for the Government to take action, so that consumer confidence does not fall any further," said Sue Robinson, Director of the RMI NFDA.
"For the economy to recover, interest rates must be cut, confidence needs to be returned to the banking system, and consumers need to feel safe in their jobs. However, it is vital that the impact of any interest rate cuts reaches the consumer for there to be any effect.
"Lower interest rates will help bring stability to the economy, and reassure consumers, and help business. In the long run it is good for the economy."
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