August car sales fail to take off

A slow month dashes hopes despite discounting, writes David Bowen

GLOOM has spread through the car market as the all-important August sales have turned out below most companies' expectations. With less than a week of the month left, sales are just 0.5 per cent higher than for the same period last year.

This means total August sales are unlikely to be much above 455,000, compared with the 475,000 forecast by Vauxhall and Ford.

"It's not really a gang-buster August," a Vauxhall spokesman said. "Sales will be flatter than we had expected." A spokesman for Rover said the month "is no great shakes", adding that his company had not been planning on a higher sales volume.

Market leaders Vauxhall and Ford have been involved in heavy discounting to keep volumes up. The most successful scheme seems to have been Vauxhall's 50-50 offer, under which customers pay for half the car now and half in two years' time. The company says it has been running short of some of the cars covered.

Rover's policy of moving up-market, to escape a head-on fight with Vauxhall and Ford, seems to be running into resistance from consumers. Its market share is around 10 per cent, the lowest ever, although chief executive John Towers says he is no longer interested in market share, only profit.

Nevertheless, the 400 hatchback, the replacement for the 200 that was launched in May, sold slowly in its first two months, only picking up momentum in the last few weeks. It has been criticised in the fleet market press for its comparatively high price, which pitched it nearer to the Mondeo than the Escort, to which it is closer in size. The Rover spokesman said recent price increases by Ford and Vauxhall have narrowed the price gap.

Land Rover dealers have found they have had to offer big discounts on the Discovery model, even though sales remain strong. One dealer said the company had launched a new model while too many of the old version were still in stock. The early launch seems to have been prompted by Norwich Union's refusal to insure the older model because its security system was not good enough. The Discovery, which can easily be broken up for valuable spare parts, is near the top of the motor thieves' hit-list.

The industry is concerned that the UK remains flat at a time when continental markets are also weakening. The end of the Italian and French "scrapping levies" in June have caused those markets to dip suddenly. Car companies are now concerned that the scheme, under which the two governments paid people to scrap old cars, did not do any more than bring sales forward. It now seems likely that many manufacturers will have to go on to short- time working over the winter, as they have for the past few years.

Once again, though, British industry will be less affected than its continental counterparts. Although Ford and Vauxhall may have to make cuts, overall production will continue to rise, protecting the components industry. Honda and Toyota are continuing to build up their UK production at the expense of imports from Japan, and next year Ford at Dagenham will start producing Mazda-badged Fiestas for export.

Start your day with The Independent, sign up for daily news emails
Barn owls are among species that could be affected
charity appeal
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy as ECB finally wield the axe
Life and Style
food + drink
Arts and Entertainment
a clockwork orange, stanley kubrick
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Ashdown Group: Marketing Services Manager - (communications, testing, DM)

£32000 - £35000 per annum + benefits: Ashdown Group: Marketing Services Manage...

Guru Careers: Finance Account Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: A Finance Account Manager with...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas