The new car market is continuing its decline with year-to-date figures released by the Society of Motor Manufacturers and Traders revealing a near 10 per cent slump in registrations.
In February registration fell 1.4 per cent to 75,996 units compared to the same month on 2005. So far this year registrations are down 9.7 per cent at 233,359 units.
The industry is looking to the March plate-change for a ray of hope.
'So far this year the market has suffered from two things; firstly a surge in demand for diesel cars distorting the market at the end of 2005 and secondly weaker consumer confidence', said SMMT chief executive Christopher Macgowan. 'However, we believe March will present a more accurate barometer of performance for the year. While times are still tough, the plate-change is shifting the car market spike from September to March. Competitive deals like zero per cent finance and free insurance should also help drive customers to showrooms throughout March.'
March represents more than 17 per cent of annual registrations and is estimated to be worth around £6bn. February is a low volume month, taking the smallest share of the annual market. Last year it represented just 3.2 per cent of the annual total.
The private market has been in decline for 23 months. Volumes fell in February by 12.2 per cent. Market share fell from 39.2 per cent to 34.9 per cent.
Fleet demand picked up in February, with growth of 6.3 per cent on last year. Year-to-date volumes remain low following the December diesel rush, caused by the end of favourable company car tax rates.
The SMMT says the market has been falling steadily since April 2004, although the pace has eased in recent months. February registrations were above SMMT's forecast for the month, while year-to-date volumes remain affected by the weak January result, itself a consequence of December's diesel surge.
The Ford Focus remained top of the best seller's list, outselling the second placed model, the Vauxhall Astra, by over 57 per cent in February.
The MPV market showed the best gain, up 4.9 per cent in unit terms. Supermini demand was down a relatively modest 2.4 per cent.
#AM_ART_SPLIT# Most segments showed little change in February, except within the mini and sports car markets – which fell sharply in percentage terms, down 31.3 and 22.8 per cent respectively, although in volume terms by less than 500 units apiece.
Diesel penetration continued to climb from 37.5 per cent a year ago, to 38.0 per cent this month. It remains on track to meet its full year forecast of 38 per cent. The diesel market fell by a mere 79 units in February to 28,859 units.
'Consumer confidence is still a major factor in the current new car market,' said Sue Robinson, franchised dealer director of the Retail Motor Industry Federation (RMIF).
'While this month is generally a smaller market in the run-up to the new registration in March, there is still concern that consumer confidence is a major worry, both in the car market and in the high street.
'Many consumers will have budgeted, and would have put off their new car purchases until March 1 for the 06 plate, when the showrooms promote competitive and value for money deals.'