British car buyers buck European trend

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The Independent Online
THE BRITISH car market continued to defy the slump afflicting the rest of Europe last month as June sales surged by 11 per cent compared with a year earlier.

In contrast, registrations across the European Community as a whole fell 19 per cent in June with the three biggest markets - Germany, France and Italy - all badly affected.

Last month's increase in UK sales to just under 114,000 meaEnt that registrations have now risen year-on-year in all but thrTHER write erroree of the past 15 months and was greeted by the Society of Motor Manufacturers and Traders, which publishes the figures, as further confirmation of recovery.

Sales in the first six months of the year were 9.14 per cent up on the same period in 1992. This could bode well for sales in the all-important month of August, when new L-prefix cars arrive on the forecourts.

Meanwhile, sales fell by 24.4 per cent in Germany, 30 per cent in Italy and 13.9 per cent in France. According to the European Automobile Manufacturers Association, EC registrations fell by 17.8 per cent in the first half of the year compared with the same period in 1992.

The downturn in Continental markets is beginning to affect UK car makers. Peugeot-Talbot is cutting production at its Coventry plant by 300 cars a week from September because of declining overseas demand for the 405 model.

It is also putting pressure on the agreement reached last year limiting Japan's share of the EC market. The accord was based on a forecast that the EC market would fall by only 6.5 per cent this year. EC officials are meeting their Japanese counterparts next week in a bid to persuade them to cut exports further.

Owner-managed businesses are twice as confident about economic prospects as they were six months ago, according to a survey of chief executives and finance directors by Ernst & Young, the accountants.

London and south-east England showed the most dramatic improvement, with 66 per cent of companies expecting the economy to improve compared with 28 per cent at the end of last year. Overall, the figure rose from 32 to 64 per cent.

Yesterday's survey coincided with a report from KPMG Peat Marwick, the accountants, showing a fall of more than 30 per cent in business failures in the second quarter of this year. Receiverships have now fallen for three consecutive quarters.

(Graphic omitted)