NEW car registrations fell by 11.5% in January – the seventh successive month to show a decline – heralding what promises to be another tough year for the automotive industry.
The Society of Motor Manufacturers and Traders said the figure of 128,811 vehicles was slightly ahead of its forecast for the month and has highlighted the VAT increase to 20% as one of the main reasons for the fall in sales.
It said consumer confidence was falling and has urged Chancellor George Osborne to freeze fuel duty in next month’s Budget to ease the burden on motorists.
Nearly all of the major manufacturers were down compared to the same month last year with the notable exception of BMW, which was up more than two thirds (67%) on 2010.
Jaguar declined almost 18% while Land Rover was just 0.5% ahead of the same month last year.
BMW’s Mini, normally one of the successes of the UK car industry, also saw reduced sales, down almost a quarter at 24%.
Vauxhall fared better than most, down just 4% on 2010 and enjoying three models in the Top 10 best sellers for January – Astra (3rd), Corsa (4th) and Insignia (8th).
Rival Ford was down more than 11% – despite having the two best selling models – Focus and Fiesta respectively. Volkswagen was down 26% and Toyota 24%.
In the luxury sector, Aston Martin was up almost 6% – although this represented just three cars more than last January – while Bentley fell 7.4% with 75 vehicles sold compared with 81 last year.
Paul Everitt, SMMT chief executive, said: “January marks the beginning of a challenging year for the UKI motor industry.
“Consumer confidence is low and it is important that government uses the March Budget to help relieve some of the financial pressure on motorists by freezing fuel duty, while providing stability and certainty on motoring taxes.
“Despite the challenging conditions, the demand for low CO2 emitting and highly fuel efficient cars continues to grow.”
However, the SMMT also said demand for executive, luxury and MPV vehicles had recovered on last year due to the end of the scrappage incentive scheme.
Graham Bushby, Birmingham-based head of Baker Tilly’s national motor group, said: “It has not been a good start to the year from the consumer’s point of view. Around one in four (27%) are reported by The Nielsen Company and the British Retail Consortium as having no spare cash and individuals’ confidence in the economy and their finances has suffered its largest drop in nearly 20 years. Therefore, it was to be expected that the retail car industry figures for January would be disappointing.
“The SMMT was predicting a 5% fall in registrations for 2011 and whilst comparisons are difficult with 2010, which was affected by the car scrappage scheme, the January registrations of 128,811 are the second lowest January figures this century.
“Ignoring the effects of the scrappage scheme, January registrations over the past decade have represented about 7.4% of the eventual year’s registrations. Applying this percentage to 2011, the year’s projected registrations would number just over 1.7 million – 14% down on 2010 and far worse than the SMMT forecast.”
