Collapse in new car sales - motor industry clutching at straws
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The Society of Motor Manufacturers and Traders has reported a collapse in new car registrations as potential car buyers stay away due to a combination of low consumer confidence, tighter rules on credit and rising fuel and insurance costs. New car registrations in the UK fell 21.2% in the year to September to 330,295 units and the year-to-date volume is down 7.5% to 1,794,419 units.
As you can see from the accompanying chart, sales of new cars are highly seasonal because of the release of new registration plates. Our second chart shows the annual percentage change in sales and the fall off is remarkably steep. Perhaps unsurprisingly, the SMMT is calling for government intervention in the car industry - the press release issued with the new data said:
“Government action is now needed to restore consumer confidence and boost demand in the real economy. The chancellor’s pre-budget report should set out a package of measures to boost demand for new fuel-efficient cars and scrap plans for unfair increases in car tax.”
I am not sure whether intervention through a range of sweetners for consumers will do much good. There has been an undeniable change in consumer sentiment and far more people are now saying that this is not the time to be making major purchases as the latest Nationwide Consumer Confidence survey makes clear.
But for cash buyers, the weakness of market demand creates an opportunity. There are some really good price deals to be had at the moment.
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