August car figures flag in face of weak market

Click to follow
The Independent Online

New UK car sales in the crucial month of August are likely to be down on last year, according to early estimates by motor manufacturers.

Figures for the first nine days of August, traditionally the industry's biggest-selling month, are down by about 1.5 per cent to just under 245,000.

Neil Marshall, policy director of the Retail Motor Industry, said: "It looks like a lot of cars, but it is not enough. The market continues to weaken."

The annual registration change-over in August normally accounts for about 25 per cent of annual sales, and about 10 per cent in the first few days of the month. More than 452,500 cars were sold in August last year, the highest month on record.

Official figures are compiled by the Society of Motor Manufacturers and Traders, which sometimes publishes figures based on the first few days. The SMMT said its members - the motor industry - had decided not to release such details this year. However, an industry source said yesterday: "The figures are very much level-pegging with last year."

Following a 7.5 per cent rise in annual sales in 1994, to 1.91 million cars, manufacturers had been hoping for a further sales boost. But despite higher fleet sales, general economic fears have deterred private buyers.

Although company car sales and the fleet market have risen by about 7 per cent this year, retail sales are down by about 8 per cent. This is despite a string of sales incentives which have cut dealers' margins to the bone.

If sales for the remainder of August stay at the same level, they will be down by about 7,000 on last year to 445,000. However, the National Franchise Dealers' Association believes the early August figures may be distorted by recent tax changes.

Alan Pullen, director of the group, believes the removal of value added tax on leasing vehicles from 1 August may have encouraged buyers to delay purchases until later in the month. Mr Pullen still believes August's sales would be up on last year, reaching about 470,000.