New car registrations have increased by 11.4% to 367,929 units in September, the third successive month of growth this year.
Modest growth of 2.5% had been predicted, but the market was almost 30,000 units above forecast – although still 51,361 units down on the 2007 September market.
September is traditionally a strong month thanks to the plate-change and, helped by the scrappage scheme, there have been 37,634 more sales this month than the same month last year, despite the global downturn.
Over the past three months, demand has risen by 8.3%, but remains 15.5% (or 277,380 units) down year-to-date and down more than 400,000 units over the past 12 months.
Scrappage makes up one-fifth
Scrappage accounts for one-fifth of sales generated – 77,316 units of the month’s sales. While the scheme continues to prop up vehicle registrations, its margin has decreased from last month where it accounted for a quarter of sales.
Since the beginning of the scheme, there have been 238,671 orders on scrappage, of which 181,117 have been registered.
Naturally, there is still concern about what will happen to UK new car sales when the scrappage scheme runs out.
Such apprehension has been calmed for the moment after the Government announced an extension to the scrappage scheme.
After much demand from the industry, business secretary Lord Mandelson revealed another £100 million or 100,000 cars would be made available on the scheme.
However, it will still end in February if the funding has not run out by then.
Mandelson said the Government had listened to the concerns of manufacturers and that's why the scheme was extended.
But he added: “We must make sure the help we do offer is targeted, limited and proportionate.
"This is not a blank cheque to the auto manufacturers, but recognition that there is still a short-term challenge to boost demand and confidence in the sector.”
SMMT chief executive Paul Everitt said: “Market conditions remain challenging with demand being underpinned by the extremely successful scrappage incentive scheme.”
He added: “The extension of the scheme will help to sustain demand through the latter part of this year and into 2010.
"This will allow economic recovery to strengthen and safeguard valuable industrial capability.”
Retail Motor Industry Federation director Sue Robinson said: “Car dealers are reporting the scheme is continuing to provide a halo effect for overall car sales and is helping increase footfall into showrooms by general buyers as well as scrappage buyers.”
September market largest this year
The 2009 September market is expected to be the largest month of sales this year, accounting for almost 20% of annual volume.
The market was up 54,017 on the volume recorded in March. In the previous five years, March had been the largest monthly market.
Dealers are no doubt feeling more positive following the September sales. These new figures will also help build consumer confidence in the market driving more customers to showrooms.
Registrations from private buyers and of small cars rose strongly.
Private demand was up 41.3%, boosted by the scrappage scheme and year-to-date volumes are now within 1.9% of last year’s levels.
Small car demand continues to rise, with mini volumes up 195% and the supermini segment up 21.2%.
Alternatively-fuelled vehicle registrations rose 45.5% in September, due to new models.
The Ford Fiesta was the best-selling model in the month for the seventh time this year.
Winners and losers
Ford has led the way with scrappage sales, registering 9,384 units in September
Hyundai –arguably the success of the moment – comes second with 8,387 scrappage registrations.
The figures show overall sales for the South Korean brand in September rose 122% giving them a market share of 3%.
Kia has doubled its sales from September last year, selling 9,778 units, of which 5,130 were scrappage.
Alfa Romeo volumes have risen by 148%, no doubt helped by its compact car Mito.
Daihatsu continues to struggle with the tough market with September sales down 73.63%.
Other volume brands down this month include Mercedes Benz (-14.12%) and Suzuki (-8.47%).