Auto manufacturers struggle in weak retail market

JAGUAR Land Rover has continued to see a decline in its UK sales as latest registration figures show a weakening in the new car market compared with last year.

Figures for June show Jaguar sales down almost 18% compared with the same month last year, while for Land Rover, sales declined almost 16%.

What will be disappointing for the firm is that main rival BMW grew its sales by more than 16%, while Audi grew almost 20% and Mercedes-Benz by more than 5%.

There was better news for the area’s other niche car manufacturer, MG-UK. The firm began to benefit last month from the launch of the new MG6, to such an extent its sales grew 140% compared with the same month last year.

However, volumes are so low that this only equates to 48 cars as compared to 20 last June. Nevertheless, the firm will be buoyed by the news; coming so soon after it hosted a visit by the Chinese Premier.

Japanese manufacturers Honda and Toyota continued to struggle, down 47% and 34% respectively as the parent organisations continue their slow recovery from the devastating effects of the March earthquake and tsunami.

In the volume sector, Ford maintained top slot, with Vauxhall not far behind. In the luxury sector, Aston Martin declined 12% as it sold 11 fewer cars last month compared with June 2010, while Bentley was up 34.5%.

Across the industry as a whole, new registrations declined 6.2% on June 2010, although this was slower than the year-to-date rate of 7.1%.

The Society of Motor Manufacturers and Traders said the volumes were in line with its expectations, with demand in the fleet sector helping to offset the weak retail market.

SMMT chief executive Paul Everitt said: “The balance of demand makes this a tough time for vehicle manufacturers and their dealer networks. Slow but steady economic growth in the second half of the year should see volumes increase, although the overall market is still expected to be around 1.93m units.”

Richard Lowe, head of retail and wholesale, Barclays Corporate, said: “The polarisation between fleet and private sales is becoming increasingly apparent. Consumers still remain reluctant to buy cars, even though the pace of slowdown is reducing, fortunately the collaborative relationship seen between dealers and manufacturers has ensured that the fleet market is growing.

“Whilst the market is down on last year, our clients are beginning to note more positive sentiments and with figures in line to meet industry expectations, we can expect this to bear out as we head into the autumn and winter.”