AM Online

Market depends on football and sunshine

May registrations rose by 1.1% to 190,002 in this year’s first month-on-month increase but comments by the SMMT and RMIF reflect the fragility of prospects for the UK car market.

Christopher Macgowan, SMMT chief executive, detects a small upturn in consumer confidence, “in what is proving to be a competitive market”. He hopes “a burst of better weather and a strong England performance in Germany will be reflected in new car sales”.

According to the SMMT, a feel-good factor following World or European Cup success has previously led to a rise in registrations the following month – though that’s unlikely to help Scottish retailers. That hope has to be weighed against a forecast by Eurotaxglass’s that World Cup fever will deflate June’s car sales.

Hopes for British Motor Show

Sue Robinson, director of the RMIF’s National Franchised Dealers Association, is more downbeat because her members are reporting “a very patchy climate”. She says: “Dealers are hopeful that June will continue the slight improvement shown in May before the onset of the traditionally low sales months of July and August.”

The market could receive a boost from July’s British International Motor Show. The SMMT’s Christopher Macgowan says: “With world debuts at the show, car buyers will be able to see just how many options there are.”

The SMMT believes the introduction of new models is the reason for a year-on-year 13.4% increase in supermini registrations. It suggests the VW Fox, Fiat Grande Punto, Citroën C1, Renault Clio, Peugeot 107/1007 and Toyota Aygo are leading the improvement.

Volkswagen’s increase in May was almost 25% while Fiat rose by nearly 80% (to 4,367, from 2,430 a year earlier). Others with new superminis were down (Peugeot by 15.67%, Toyota by 5.61% and Citroën by 3.5%).

Changes in fleet policies

A spokeswoman says Toyota’s retail sales rose, but fleet registrations fell in May. Like Renault and Nissan, Toyota is rejecting unprofitable fleet deals designed to boost monthly figures.

A Peugeot spokesman says 107 registrations in May totalled 1,154 and 6,550 year-to-date. “Our decline in May has to be set against the 2.31% dip year-to-date, which is better than the market as a whole, and we now have the 207 on sale.” A VW spokeswoman says almost 1,000 units of the Fox were registered last month.

Supermini registrations rose sharply over the first four years of the decade. The SMMT’s 12-month rolling figures went up from fewer than 600,000 superminis in January 2000 to 877,172 by March 2004.

This was driven by competitive pricing, growth in the economy and buoyant private demand. The economic slow down, a decline in the private sector and a cooling in the market’s private sector caused a fall of more than 160,000 units in two years.

The May rise – and a near 5% increase in Scottish new car sales – failed to prevent the January to May figure falling 4.3%, which represents 46,438 fewer registrations.

Retail sales fell again in May, but by only 2%. SMMT total market forecasts are 2.35m in 2006 (3.7% down YOY).

  • Download a pdf of May 2006 registration figures by manufacturer.
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