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Predictions of weak market post-September 11 'false'

Predictions that showroom traffic would slow to a trickle as the effects of recession in the US rippled across the Atlantic have been proved inaccurate after record October sales.

Dealers enjoyed a buoyant month as sales reached 185,325 – the fifth time a record has tumbled this year. With more than 2.1m sales year-to-date, 2001 is heading towards an all-time high, beating the 2,300,944 units in 1989.

Robin Woolcock, head of Volkswagen Group UK, believes the reason for the success this year is the “phenomenally strong” economy.

“It has been a year for records,” he said. “ We seen record unemployment and interest rates at their lowest for as long as anyone can remember – and the prices of cars have come down.”

Mr Woolcock does not expect sales to keep rising next year though. “I don't see prices coming down any more and I think we will see a market next year similar to those in 1999 and 2000.

“The conditions have been right for private buyers and we have seen a big rise in this area of the market.” Figures from the Society of Motor Manufacturers and Traders revealed that private buyers have accounted for 1,065,636 of the new cars sold this year, a rise of more than 27% on 2000.

SMMT chief executive Christopher Macgowan said: “Consumers are confident, there's no doubt about that. They know a good deal when they see one and there are plenty of those at franchised dealers.

“No one would suggest that 13 consecutive months of growth will last forever, but equally we need to be careful not to talk down a strong market for new car sales.”

October followed the trend set in previous months, with the big risers maintaining their momentum. Alfa Romeo is nearly 84% up year-on-year and Citroen is ahead 58%, while Jaguar is up 42%, helped by X-type.

October was particularly strong for MG Rover, which# saw sales increase 51% over the same month last year with 8,513 vehicles. Seat also performed well, up 54% with 2,070 sales. Ford and Vauxhall battled for the number one spot – Ford sold just 13 more cars than its rival.

Daewoo remains the big under-achiever with sales down 44% year-on-year, but the company is not downbeat.

S K Kim, Daewoo Cars managing director, said: “We have been going through a transition with General Motors proceeding with plans to buy the company in Korea while we have been re-focusing the business here.”

This included switching from direct sales to a dealer network, while there has been some consumer uncertainty about the future of Daewoo.

Mr Kim said: “That uncertainty will disappear when GM completes the purchase. We are also focusing our attention more on private buyers rather than fleet sales and while the numbers are down our business is in much better shape.”

While the UK is performing well, the slow down in other parts of the world, particularly the US, has had an effect on prestige carmakers. A slump in US orders forced Rolls-Royce and Bentley to put its Crewe workforce on a three-day week.

Jaguar extended its annual autumn shutdown at the Browns Lane and Castle Bromich plants for five days because of uncertainty over future demand – but the company claimed orders were still strong.

A spokesman said: “Dealers around the world have reported a slow down in showroom traffic, so we just wanted to balance out production.”

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