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Dealers reject 'surge'claims

Claims by the Society of Motor Manufacturers and Traders that new car buyers are returning to the market have been dismissed as “rubbish” by franchised dealers. Retail sales last month slumped by more than 10% year-on-year.

Dealers say trading conditions for new cars remain “extremely difficult” but used car business is picking up and residual values are starting to rise.

“With no new car buyers in the market, there is a shortage of good part-exchange stock,” said one dealer group chief executive. “The clever people were out restocking before Christmas when prices were rock bottom.”

Some smaller franchised dealer group bosses were shocked by mid-month national press stories about groups hoping to import directly from Europe and by-pass the existing distribution channels.

They said the market was just starting to settle when the story broke, frightening buyers away again.

The SMMT claimed new car registrations in January “exceeded expectations” after the market recorded a 1.8% rise on the same month last year.

Total registrations were 185,040 and the SMMT is already forecasting a full year figure of 2.2m units.

Christopher Macgowan, SMMT chief executive, said: “New car buyers are back in the market and today's figures reflect a surge of interest now the Millennium has begun.”

But dealers say the only activity in the market was from fleet-based contract hire deals coming up for renewal and from manufacturer preregistration.

The market growth, of 3,198 units, can easily be accounted for by the increase in Ford Focus registrations, up 3,923. This time last year Focus diesel and estate versions had only just been launched.

The SMMT's own figures indicate a 7.7% increase in fleet registrations and a massive 26% increase in business registrations - that is registrations to companies running fewer than 25 vehicles.

This sector now takes more than 11% of the total market while private car registrations have dropped back to less than 37%.

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