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August new car registrations drop 17.5%

New car registrations fell by 17.5% year-on-year as expected in August to 55,305 units.

It’s the second consecutive fall and while the industry traditionally has a slow summer period, the Society of Motor Manufacturers and Traders is expecting the trend to continue though to the end of the year.

However, volumes are up 13.2% to date against last year, at 1,300,413 units.
The SMMT’s full year forecast suggests 2010 registrations will finish at 2 million, up 1.2% on 2009.

Paul Everitt, SMMT chief executive, said: “New car registrations were down 17.5% in August and conditions will remain challenging through the rest of the year.

“The industry enjoyed a better than expected first half of the year and, despite the difficulties, SMMT is forecasting that new car registrations will close just ahead of 2009 figures.”

 Sue Robinson of the Retail Motor Industry Federation (RMI), said: "August is always the smallest monthly market and the decline points to just how fragile the new car market is.

"Consumers are delaying making ‘big ticket purchases’ such as new vehicles until confidence in the economy is strengthened." 

Robinson said consumers were still uncertain of the market and summer holidays, combined with a desire to wait for the new 60 registration plate in September led to the fall in registrations in August.

She said: "The slow down is likely to continue for the remainder of the year while the Government reviews its spending and tax policy and consumers see how this affects them personally.

“We expect the market to remain challenging for the rest of the year, although we do expect to see an increased level of activity in the market generated by the impending VAT increase at the beginning of 2011. Therefore, we need manufacturers to support the market, and help dealers, by ensuring vehicle prices remain competitive and offering attractive incentives to buy to consumers. What we do not need to see is manufacturers supporting the market by encouraging large scale pre-registration exercises.

 

“Although this is the general picture of the market there will be considerable regional variation in sales due to the impact of the threatened public sector job cuts and the varying strength of the economy across the country."

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