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Flat year forecast as sales bust 2m mark

A positive December new car market finished off the 2012 sales drive which saw an extra  103,356 registrations of new cars over the 2011 total.

The 2,044,609 total industry volume for 2012, the strongest result in four years, and the 5.3% increase year-on-year, the fastest growth since 2001, were due to strong consumer demand, reported the Society of Motor Manufacturers and Traders.

Private registrations were up 12.9%, and accounted for 45.5% of the market.

In contrast with the private market, fleet demand remained flat and orders from SME businesses declined.

SMMT chief executive Paul Everitt said the industry had produced its best result since the recession struck.

However, his organisation warned that the UK market is still almost 15% below the pre-recession years, and it sees more challenges ahead in 2013.
Everitt added: “Boosted by strong consumer demand, the market grew at its fastest rate for 11 years with innovative, fuel-efficient cars keeping buyers in showrooms.

“Looking ahead to 2013, we anticipate the market will hold firm, with manufacturers and dealers working hard to deliver quality and value to motorists.”

Regular replacement cycles, including customers on personal contract plans or leases, and strong offers and incentives are thought to have contributed to 2012’s upturn.

The SMMT also suggests some buyers may have shifted from being used car customers to buying new thanks to the competitive deals available. Demand was strongest for city cars and superminis, although SUVs also grew strongly.

Sue Robinson, director of the RMI National Franchised Dealers Association, said the overall market for 2012 showed “encouraging progress” although consumer confidence is still fragile.

“It indicated that competitive offers by manufacturers will persuade retail buyers into the showrooms.

Looking into 2013, consumers will still need
strong encouragement to commit to big ticket purchases such as cars,” she added.

Her view was echoed by Richard Lowe, head of retail and wholesale at Barclays, who said: “The real question is whether this demand will hold. Consumer pockets will con-tinue to be squeezed, and with pre-
registration figures increasingly accounting for a larger percentage of the market, both manufacturers and dealers will have to be careful that supply does not outstrip demand.”

Examining individual brands’ performance through 2012 suggests a product push has helped many during the year.

The highest percentage growth was recorded by the market share minnows of SsangYong (up 351%), Chrysler (up 182%), MG (up 117.2%) and Infiniti (up 38.7%).

However, key new cars such as Evoque, 911 and Cee’d helped to ensure a skywards trajectory for the established brands Land Rover (up 29.2%), Porsche (up 25.3%) and Kia (up 24.3%).

All three moved up a position or two in the chart of the 44 individual brands which report their registrations to the SMMT.

Several other car brands reported best ever registration volumes.

Hyundai’s 18.1% growth to 74,285 units put it into the top 10 carmakers by volume, the first time any Korean brand has done so. Its climb knocked down Citroën, which had nevertheless outperformed the overall market with a 7.58% increase to 73,656 units.

Hyundai UK president and chief executive Tony Whitehorn said 2012 was an exceptional year, but 2013 will see the brand stabilise.

“Since 2008, Hyundai has more than 250,000 more cars on the road and has seen sales nearly triple in just four years.

We have risen from 21st in the UK car market to breaking through at number 10 – that is a tremendous achievement and a testament to the hard work of our employees and the dealer network.”

Nissan’s 105,835 new car registrations was also its highest ever.

Nissan’s managing director Jim Wright said the success was due to a combination of the hard work of Nissan GB’s dealer and head office teams, the desirability of Nissan’s core Qashqai and Juke crossovers, strong finance offers and improved consumer perception of the
Nissan brand.

Skoda continued to break its own records as its range expanded, achieving a 19% uplift to 53,602 registrations and its highest ever UK market share. Its new Citigo, which has put Skoda into the A-segment for the first time, contributed more than 4,000 units to the total.

However the C-segment Octavia and B-segment Fabia continue to be its best-sellers.

Skoda UK director Alasdair Stewart  said: “With the arrival of the new third-generation Skoda Octavia just around the corner, we’re confident that 2013 will bring even greater success.”

The competitiveness of the 2012 market meant there were some brands that suffered, particularly those which lacked the financial clout to fight Europe’s big spenders.

Renault effected its business reorganisation, with a rationalisation of product range and retail network, and saw volumes drop 40%.

Managing director Thierry Sybord said that phase has gone to plan, and now Renault UK will begin rebuilding in 2013 with the arrival of new Clio and introduction of its Dacia value brand.

Alfa Romeo and Maserati also declined, leading Fiat Group to prepare a repositioning of its sporty and prestige brands as it desperately wants to be regarded as competition to the German establishment.

Mazda, Mitsubishi and Subaru couldn’t keep up, being focused on their small marketplaces.

And questions were asked about the viability of UK operations for Proton and Lotus – both went backwards fast, and worryingly were outsold even by Saab, despite the Swedish carmaker’s demise in late 2011.
The 12th month

December’s monthly market continued the unbroken trend of registration growth which started in March, resulting in a 3.7% uplift, or 4,369 more cars than December 2011.

Ford, having excelled at running out the Fiesta ahead of its facelift, turned off the tap a little and let Vauxhall take the lead by 616 units.

BMW shifted the third highest volume of the month, its 10,175 units a 35% rise year-on-year and in contrast to its premium segment rival Audi, whose volume shrank by 24.2% to 4,786 registrations.

Mercedes-Benz also finished a record year with a 9.3% rise in December registrations, and Jaguar rose by 29.6%.

The month’s stragglers included Proton, with only one registration, and Alfa Romeo, Jeep, Lexus, Mazda and Chevrolet.

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