Car sales overcome seven-year itch

The British motor industry is expecting the best August sales for seven years, even as it prepares itself for the abolition of the annual new registration rush.

The optimism comes from signs that the private buyer is finally returning to the market. "In the last quarter, he has been much more in evidence," said a spokesman at dealer Lex Service. "And as 60 per cent of August car sales are by private buyers, that augurs well for the month."

About a quarter of all UK car registrations are made in August, when the new prefix letter is introduced, and the car companies gear much of their effort to winning market share then. Lex believes it would not take much for sales to exceed 500,000, a 7 per cent gain on last year.

The big manufacturers are more cautious. Vauxhall predicts sales of 488,000. It has had a disappointing first half of the year, with sales falling by 2 per cent against an overall market rise of 5 per cent. Ford says that it is "reasonably optimistic" but predicts growth of just 3 per cent, to about 485,000. There is, however, widespread agreement that the 2 million barrier can be cracked for the whole year: in 1995, 1,945,000 cars were registered.

A survey by Autoglass, due to the published this week, will confirm the return of confidence. It will say that 36 per cent of drivers expect to get a new car this year, compared with 27 per cent last year. Confidence is highest in London, where the figure is 45 per cent. The study finds that increased job security is the biggest factor in the improvement. "For the last two years people have been holding back on purchasing decisions as well as general maintenance," Autoglass says.

There are, however, no signs that fierce competition between makers is abating. "It is very cut-throat," a Peugeot spokesman said. "The private buyer is only gradually being tempted back."

The Department of Transport will shortly issue a consultation document that is ex- pected to suggest abolishing the annual new registration phenomenon which, it is widely felt, puts unnecessary strains on the industry. The favoured replacement is to change the prefix every three months. But this would exhaust the current alphabet within three years.