Car dealers suffer diving sales

New car sales figures today for January are expected to reveal a further weakening of consumer confidence with a steep decline in private purchases.

Total sales in January, the second most important month, are thought to be only slightly down on last year's 198,000. But this is due to a more buoyant car fleet market as businesses start replacing vehicles.

The figures from the Society of Motor Manufacturers and Traders will add to the gloom for the retail car trade, which suffered a sharp fall in sales in the final months of 1994.

January normally accounts for about 10 per cent of total demand, and tends to be the busiest month after the annual August registration change-over.

Car dealers are reporting that more buyers are turning to the nearly-new market. A report out today by HPI Motor Industry Monitor shows that used car sales rose year-on-year by 13 per cent in the final quarter of last year. This compared with a 6 per cent rise for new cars.

With consumer confidence dented last week by another rise in base rates, HPI predicts that the surge in demand for used cars will continue in 1995.

Another report out today giving a regional breakdown shows that new purchases fell in 27 counties last year despite an overall increase nationwide.

Nine areas saw 1994 sales dip by 5 per cent or more compared with Lothian, which fell by 10.1 per cent.

In contrast, according to the Retail Motor Industry Federation, sales in Wiltshire soared 19.4 per cent, in Greater Manchester by 15.4 per cent, in Berkshire by 14.3 per cent, and 13 per cent in West Sussex.

Neil Marshall, policy director of the RMI, said: "The buoyancy in the South-east is particularly welcome but recovery is clearly taking much longer to return to many other parts. The significant fall in sales in East Anglia and Scotland last year gives particular cause for concern."