Urgent government action urged after September slump

Dealers are worried that a surge of late September registrations by some manufacturers will add to the difficulties of selling new cars in the final quarter.

With two registration days remaining the market was running 34% down – the month’s eventual year-on-year decline was 21.23%.

One dealer said: “This sudden surge of pre-registered cars will come through onto the market as demonstrators or in some other way. Some manufacturers could see their action as the only way of lessening the impact on their 2008 volume forecasts.”

Only three brands managed a year-on-year increase in a disastrous September – Smart by 9.26%, Jaguar 3.56% and Audi 1.38% – as the total market plunged 21.23% to 330,295 units. That compared with 419,290 a year earlier.

The industry welcomed this month’s interest rate cut to 4.5% but the SMMT is calling on the government for a wider and urgent response because “UK consumer confidence is at its lowest level since 1974”.

The SMMT wants the government to rethink planned vehicle excise duty changes and to consider a scrappage incentive scheme to encourage owners of older cars to replace them with lower-CO2 models.

Prospects are poor for the final three months of 2008. “A further drop of 20% would leave full-year volumes at 2.165 million, the lowest since 1996,” says the SMMT.

September’s sales performance was the month’s worst since the twice-yearly plate change began in 1999.

The month’s registrations typically account for 17% or more of the annual volume, making it a close second to March.

But this time September was more than 120,000 units down on March when the 08-plate arrived.

A falling trend

The SMMT says demand from retail buyers has fallen in every month of 2008 – September’s 23.3% dip was only slightly better than August’s 23.6% decline.

Since April the 12-month rolling total has dropped by almost 150,000.

The SMMT, assessing prospects before the government and Bank of England stepped in to prop up the banks, saw little chance of the market stabilising before the third quarter of 2009.

But dealers are trying to remain positive and optimistic.
Mike Finn, managing director of the Wellington Motor Group and chairman of the Nissan dealer council, said: “Fewer people are coming into showrooms, but a larger percentage than before have a real interest in buying.

We must all remember there are still people who want to buy cars, though some will be bargain hunters.”

September produced odd statistics. Year on year Nissan’s market share was up (from 3.50% to 3.76%), although sales are down more than 15% year-on-year.

Finn said: “The important thing to remember is that Nissan sold more than 2,000 fewer cars compared with September 2007.”BMW blamed its 24.11% fall on the revised 3 Series only just starting to become available in September.

“It’s important not to read too much into any single month,” said a spokeswoman. “Year to date, we’re only 125 units down on 2007.”

Honda was down almost 40%, and year to date is trailing 2007 by more than 17%.

A Honda UK spokesman said: “We were down that much in September because we didn’t call on our dealers to pre-register.”