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Retail boom sparks 'best year since 1989' forecast

Private buyers flooded into showrooms in March, prompting the Retail Motor Industry to claim that 2001 could be the best year for more than a decade.

Registrations rose 1.5% to 408,024, a record for the month, with private buyers accounting for 53.8% – 219,502 cars – up 17.2% on March 2000. Fleet sales dropped 10.1% to 150,177 and business sales were down 19.4% at 38,345 units.

{*March 2001*} Sales for the first three months are 675,083, up 2.2% over the first quarter of last year. Private sales are up 19.7%. The market buoyancy led to the Retail Motor Industry to state that “the new car market is on a high and 2001 could turn out to be the best since 1989.”

Alan Pulham, National Franchised Dealers Association director, said: “Car buyers are clearly reacting to the value for money that new cars offer and this is boosting retail private sales.

“Customer confidence over the past six months is indicative of the remainder of 2001, and this year's sales could well match the all-time high of 1989 when 2.3m new cars were sold.”

The SMMT is taking a more cautious approach, keeping its forecast at 2.25m. It warns that last year's turbulent market with its uneven sales pattern makes year-on-year monthly comparisons difficult to interpret accurately. The SMMT's forecasting group meets later this month to revise its full-year forecast.

Despite the caution, Christopher Macgowan, SMMT chief executive, said: “This record month clearly indicates the turnaround in the UK market. The dramatic rise in private buyers reflects the confidence that consumers have in the franchised dealer network.”

This shift has been reflected in the relative performances in the league table.

Companies with a traditionally strong retail base like Citroen, up 56.3%, saw sales rise in the first quarter. Alfa Romeo was up 59.2% and Skoda up 33.6%.

Vauxhall, which has a large fleet customer base, saw sales down 5.4% for the first quarter; Ford was stable, up 1.9%, while Renault, with run-out of Laguna and arrival of Laguna II, saw quarterly sales down 12.6%.

There were big falls for Mazda (down 38%) and Kia (35.2%) but healthy gains for Mitsubishi (18.9%) and Suzuki (16.4%). Citroen's success is partly down to the performance of the Xsara Picasso, which was the best-selling compact MPV in March with sales of 7,416, ahead of Renault Megane Scenic and Vauxhall Zafira.

The strong private demand is also reflected in the top 10 sales, with superminis filling six of the best seller slots. The Peugeot 206 almost toppled the Ford Focus from the No1 position while Ford Ka made it into the top 10 at the expense of Renault Megane.

Registrations of imported cars again edged forward in March, rising 6.3% to take a 74.2% market share.

There is, though, one worry for the industry. The introduction of the twice-yearly plate change was intended to smooth out the traditional August peak. With March sales topping 400,000, the month will account for about 20% of the year's sales.

If the September plate change is another a bumper month, the tactic will not have worked, putting dealers under pressure to meet demand.

{*Year to date Jan-April*}

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