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New car market grows by 1.8% in 2010

car purchase

> For full details of registrations by manufacturer click here.

New car registrations rose by 35,847 units to 2,030,846 units, ending 1.8% up on 2009 figures.

The fleet market rose by over 10% in 2010, but private volumes slipped following the end of the Scrappage Incentive Scheme (SIS).

The VAT rise induced, sales boost, had a limited, but notable affect on the new car market in December.

Registrations fell by 18% in December to 123,817 units, with the market a little below expectations. If scrappage volumes were removed completely from the 2009 December tally, then the 2010 December figure would have been up almost 6,000 units or 4.8%.

The Ford Fiesta was the best selling new car for a second successive year in 2010 and Ford was again the bestselling brand, whilst in December Vauxhall was the top brand and the Astra was the best selling model.

The market is forecast to decline by 5% in 2011 to 1.93 million units as difficult market conditions continue.

Paul Everitt, SMMT chief executive, said: “2010 was a year of recovery for the motor industry with new car registrations up 1.8% on 2009.

“Economic conditions remain extremely challenging, but industry expects demand to strengthen in the second half of the year. Competition in the retail sector will intensify as the industry seeks to re-balance demand across its new and used car and service and repair business. UK motor production recovered particularly well in 2010 and the outlook is for further steady growth this year.”

Paul Everitt said on BBC news this morning that rising fuel efficiency should be an incentive for consumers to buy a new car.

He said consumers facing continuous rises in fuel costs should consider the fact that cars were now 20-25% more efficient than a decade ago.

Sue Robinson, RMI franchised director, said: “2010 has been a difficult year for dealers, but the sales are there, boosted greatly by scrappage. It’s very telling that Ford’s Fiesta is the top selling model, showing that consumers are seeking fuel efficient, good value cars."

Looking forward to the year ahead, Robinson said: "With the cost of fuel rising towards 130 pence per litre, the motorist has to think carefully before purchasing a car, taking into consideration the efficiency of the vehicle, its’ likely depreciation and, in light of the economic uncertainty, whether they’re willing to commit to finance deals."

Robinson said dealers are indicating that interest in used cars is elevated.

The value of this sector is amplified as consumers decide not to replace their new cars, meaning that there are less used cars on the market.

She said: "The first half of 2011 was always going to be challenging for car dealers, as consumers ascertain how the VAT increase, fuel price rises and the growing cost of other commodities affect their household budgets.

“We are also mindful of the regional variations, with some areas of the country affected more significantly than others by the Government cuts and general deficit reduction strategy.

“However, dealers are aware of the issues affecting consumers, and there are offers available on forecourts, such as VAT freezes and various payment plans.”

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