AM Online

The big picture: Figures just don’t add up

Even while economists and media commentators talk gloomily of a recession – with some anticipating the worst in living memory due to rising fuel and food prices, collapse of the housing market and high debt levels of UK consumers – many manufacturers are spinning upbeat stories about robust car sales and optimistic growth targets over the next couple of years.

New car registrations this year are down 2.9%, which has prompted the SMMT to review its full-year forecast.

Next year it expects a dip of 0.4% to 2.325 million, although that figure is likely to be cut further.

No economic revival is predicted by experts until 2010 at the earliest – growth next year is predicted to be just 1%.

If it does occur in 2010, the natural lag means the new car market will take a further year to recover.

It puts some of the growth aspirations of manufacturers like Suzuki – 34,000 to 50,000 by 2010 – or Fiat – 60,000 to 100,000 – at risk.

They are among 10 manufacturers looking to grow their retail networks by double figures this year (see feature p21).

Add up their future targets and it swells the new car market by 186,400 units – or 8%.

But if the market continues to contract, those units can only come from rival manufacturers.

Look at the options, and the size of the task becomes apparent.

Premium carmakers show no sign of slowing down – BMW, Mercedes and Audi are all enjoying growth.

Even Jaguar has picked up.

The big two, Ford and Vauxhall, are holding their own despite their troubles in their home American markets.

The French trio have struggled in recent years, each squandering market share from a position of strength, but they have good new product which will halt the decline.

So where will these 186,400 sales come from?

It has always been the case that if you added up every manufacturer’s sales targets, it would equate to a car market of more than three million units.

And there have always been winners and losers in that scenario.

But with targets for the smaller, more niche carmakers becoming ever more ambitious, there are going to be quite a few rather unhappy company executives come 2010.

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