New car sales up by more than a quarter

NEW car sales rose by more than a quarter last month as buyers looked to take advantage of the end of the Government’s scrappage scheme incentive.

New registrations were just short of 400,000 and the scrappage scheme accounted for 12.2% of the new sales.

The launch of the new 10-registrations plates is also thought to have played a part in helping sales achieve a 26.6% increase year-on-year.

Land Rover was one of the stars, enjoying a 74% increase compared with March 2009 – flying in the face of the trend towards smaller, and more fuel efficient vehicles.

Monthly figures from the Society of Motor Manufacturers and Traders (SMMT) showed that the Solihull company sold 10,514 new vehicles last month, just a few dozen short of its best ever month in March 2006, when the brand was owned by Ford.

The company also increased its market share and now claims 2.65% of the market – just 0.04% behind Fiat, which unlike Jaguar Land Rover, has been a major beneficiary of the scrappage scheme.

It is ironic that the results should be announced today – the fifth anniversary of the collapse of the Land Rover brand’s one-time parent MG Rover.

That the sales are announced in the same week that fuel prices are expected to hit an all-time high is also unexpected and is an indication that UK motorists are not yet ready to abandon their 4x4s in favour of smaller vehicles.

The reasons for the boost are not clear but a recovering economy; competitive pricing and the new March registrations are all thought to have played a part.

The brand could also have benefitted from the harsh winter when the company’s various models were often the only vehicles capable of getting through the snow.

Although Jaguar Land Rover participated in the Government scrappage scheme, the incentive is thought to have had little impact on sales because of the initial high price.

Whatever the reasons, the performance will have cheered Indian owner, Tata Motors, together with new Jaguar Land Rover chief executive Ralf Speth and his boss, Carl-Peter Forster. Both men are newly-appointed to their positions following the resignation of former JLR chief executive David Smith in January.

Tata has had endure one of the worst recessions in the history of the motor industry since purchasing the famous brands from Ford for £1.15bn in 2008.

In the first 10 months of its ownership, the company lost around £280m as global sales declined.

The strong performance by Land Rover and the last minute rush for the scrappage scheme incentive boosted the number of UK-built vehicles being registered – the figure rising by more than 52% last month.

Sales of the Mini were strong – up 32.5% last month compared with March 2009 – while the Longbridge-built MG sports car saw a 100% rise, although this equated to a like-for-like increase of just 26 cars, such are the tiny volumes being produced.

However, Jaguar did not do as well as its stable-mate. Sales of the luxury marque saw just a 1.19% increase in the like-for-like period, while the company now claims just a 0.77% share of the market.

Many buyers may have been holding out for the launch of the new XJ saloon which has only just gone on sale and may show a difference when figures are released in a month’s time.

As expected, low-cost companies Hyundai and Kia both fared well as the scrappage scheme drew to a close with respective year-on-year increases of 145% and 93%.

Toyota appeared to have sustained little damage from its problems, caused by having to recall a number of its vehicles due to safety concerns.

The company enjoyed a 15.42% increase in year-on-year sales, although its share of the market dropped from 4.98% to 4.54%.

Ford continues to be the dominant brand, claiming 15.62% of the UK market with year-on-year sales up 18.72%.

Its Fiesta and Focus models were the two most popular choices for buyers in March.
Ford’s nearest rival, Vauxhall can only boast a 10.85% share of the market, while its sales were up just 7.8% year-on-year.

Its Astra and Corsa models claimed third and fourth place in last month’s best sellers.

Paul Everitt, SMMT chief executive, said: “The UK motor industry has enjoyed a better than anticipated first quarter.

“A strong March performance was underpinned by the scrappage incentive and improving demand in the fleet sector.

“The coming months will remain challenging and headline registration numbers are expected to dip, but underlying demand will continue to improve slowly.”