The new car market in February rose 26.4% to 68,686 units, paving the way for the March plate-change.
The rise in registrations was yet again boosted by 19.6% due to the scrappage scheme which added 13,456 units to total registrations in February, according to figures from the Society of Motor Manufacturers and Traders (SMMT).
Customers have only until the end of this month before the scrappage scheme runs out, but many manufacturers have already put their own sales initiatives in place to keep the momentum going.
The scheme’s impact is expected to diminish during Q2 with market decline expected in the second half of 2010.
Between 1999 and 2009, February typically accounted for 3.3% of the annual market, ahead of the March plate change peak. February 2010 was above expectations, just 1.3% below 2008’s tally, but still 12.2% off the 1999-2009 average.
Many manufacturers are expecting the second half of this year to be tough for dealers and there is increasing pressure on the industry to have a successful trading period through March to get businesses through the year.
March 2009 was particularly weak, down 30.5% to 313,912 units. This year’s plate-change month is expected to recover slightly, with volumes expected to push above 360,000 units this month. Over the past decade, March has been the strongest month for new car registrations, accounting for 17.8% of annual registrations.
Paul Everitt, Society of Motor Manufacturers and Traders chief executive, said: “Scrappage has generated eight consecutive months of growth in the new car market and we expect its benefits to stretch beyond the scheme’s closure later this month.
“The industry continues to face challenging market conditions, but positive trends in the fleet and business sectors suggest that negative impacts can be minimised.
“Strengthening business and con-sumer confidence remains the industry’s priority. A clear and consistent approach to CO2-based taxation and improved access to affordable credit are essential elements in sustaining recovery in the new car market.”
New car demand will be building up after a sustained period of hold-off, but with economic recovery still fragile and uncertainty over the impacts of the Budget in March and a General Election in spring, the SMMT’s outlook for registrations in 2010 is subdued and cautious, with an expected decline of almost 10% to 1.82 million units.
Toyota shrugs off effects of recall
The furore over Toyota’s global recall in February has died down now and its new car registrations actually increased year-on-year by 15.36% to 3,439 units.
The results reflect well on the Japanese brand’s UK dealers who have handled customers’ expectations. Confidence in the brand hasn’t waned as badly as expected.
According to BrandIndex, YouGov’s daily brand perception tracker, Toyota’s reputation in the UK will recover much quicker than expected. The general impression of the brand, which fell from a net positive score of 34% in mid-January to a low of -11% on February 19, has not continued to deteriorate at the same pace and has actually recovered slightly to -9% according to the latest data.
Winners and losers
Ford's Fiesta was the top-selling model in February with 3,236 units sold and 12,121 units year-to-date. However, the Hyundai i10 and Kia Picanto are still riding high in the top 10 best sellers list due to scrappage, with 1,938 and 1,573 units respectively.
Kia saw the biggest year-on-year rise in registrations in February, with a 536% increase and Hyundai saw a 225% increase. Mitsubishi dealers also saw a good month’s trading in comparison to February 2009 with a 184% increase in new car registrations to 396 units.
Renault, Peugeot and Volvo also had a very strong month.
The hardest hit in the UK market were brands that are in desperate need of new product, like Chrysler, which saw sales fall by 59% to just 22 units, and Saab, which saw sales fall by 70% to 84 units.
UK Daihatsu dealers can no longer get new stock so the brand’s figures took an expected fall of 51.8% in February.