AM Online

Contrasting views on size of new car market in 2012

Automotive market forecasters at PricewaterhouseCoopers (PwC) believe consumers’ fears of the UK economy slipping back into recession will drive new car sales below 1.9 million units next year.

This compares to PwC’s forecast of 1.935 million this year and 2.03 million in 2010. It’s also in contrast to the Society of Motor Manufacturers and Traders’ latest prediction that the market will be a “stable” 1.96 million units in 2012.

Dealers have offered differing views; some prefer to ignore economic factors out of their control while some believe the market could drop to 1.7 million as manufacturers “turn the taps down”.

One dealer told AM: “Used cars and servicing will be our main focus in 2012. We will be concentrating on our local market and ignoring any economic factors that our outside of our control.

“We won’t be worrying about the size of the market next year; we’ll just be looking to do the basics right.”

Another dealer told AM they believed 2012 would be similar to this year. He said: “2012 will be similar to this year. Retail demand will stay at low levels and fleet will perform slightly better. We’re expecting the first six months of 2012 to be tough and then the second half of the year will be better.”

One major dealer group said it would be scaling its businss for the size of the market in 2012, which could mean further cost-cutting.

There is also the view from the indutry that “new car sales will always be dictated by manufacturers,” so dealers should focus on what they can control.

An AM100 dealer said: “The market will stay at 1.9m as manufacturers can’t afford to have it drop below that.”

Michael Gartside, senior analyst with Autofacts, PwC’s automotive forecasting service, said: “Market developments continue to differ widely with the UK and France continuing to prove more resilient to the deteriorating economic and financial environment than initially expected.

“While this may appear to suggest a market nadir has now been reached, we feel that the increasing risk of recession within the UK, with declining consumer spending, is likely to push the UK new car market below 1.9m units in 2012.”

Elsewhere in Europe, the Italian new car market registred 132,579 units in November, a 9.2% fall on November 2010. Year to date, the market has fallen by 10.6%. In France, registrations fell by 7.6% in November to 179,160 and in Spain; registrations fell by 6.4% to 60,395 units, with private demand falling by 9%while company cars fell by 4.5%.

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