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December new car registrations up 38.9%

New car registrations rose by 38.9% in December to 150,936 units and full year registrations were 6.4% down giving a total market size of 1,994,999 units as predicted.

The full year sales are at their lowest level since 1995 but did meet the revised prediction by the Society of Motor Manufacturers and Traders.

Paul Everitt, SMMT chief executive, said: “The December new car market was boosted by the scrappage scheme and consumers looking to avoid January’s VAT increase.

“The 2009 market of 1,994,999 new car registrations was significantly above early expectations and reflects the positive impact of the scrappage scheme which is due to end in February.”

The SMMT is predicting a market of 1.8 million this year and is expecting a limited recovery in the commercial vehicle market.

He said: “Sustaining the progress made in the latter part of 2009 will require stronger demand from fleet and business buyers, alongside the greater availability and affordability of credit and finance.”

Since its introduction, the scrappage scheme has accounted for over a fifth of all new car registrations and is estimated to represent 20.8% of the December market.

Average new car CO2 emissions fell by 5.4% on the 2008 level to 149.5g/km in 2009.

Market breakdown

  • New car registrations dropped 25.9% or 322,524 units in the first six months of 2009. The scrappage scheme, introduced in May, reinvigorated the market with registrations in the second half of 2009 rising by 21% or 185,728 units.
  • The market rose by 38.9% to become the third best December on record and highest since 2005. The performance was above forecast, as buyers acted before VAT rose.
  • The strong year end lifted registrations to 1,994,999 units, some 67,000 above the forecast in October and 337,000 units above the April forecast (pre scrappage scheme announcement). However, 2009 was still the first sub two million market since 1995.
  • Scrappage accounted for a provisional 20.8% of December volumes, with over 280,000 units going through the scheme since its launch in May. With the scheme finishing the overall new market is forecast to fall back below 1.8 million units in 2010.
  • Private demand performed better than expected, buoyed by scrappage and, more recently, consumers taking advantage of reduced VAT rates.
  • Ford’s Fiesta was the best selling model in December and over the full year.
  • Average new car CO2 emissions continued to fall. The improvement was the best on record, heightened by the scrappage scheme and impact of recession. Once these temporary measures are gone the rate of decline may moderate.

RMIF

Sue Robinson, RMI director, said: "Car showrooms in 2009 have seen the return of the private buyer, with increased footfall into car dealerships. Market breakdown

"The scrappage scheme has tempted private buyers back into the new and used car market, this year has seen a 13.7% rise in private vehicle purchases compared to 2008.

"However the business market is still fragile, with many fleet and business operators delaying the replacement of vehicles."

Robinson said 2010 was set to be a challenging year with the return of 17.5% VAT, an end to the scrappage scheme and an uncertain political landscape.

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