Car sales slump looms as imports dominate

THE MOTOR industry warned yesterday that new car sales could fall by as much as 10 per cent this year as recession and uncertainty take their toll on garage forecourts.

The warning came as a leading Japanese car importer claimed that figures for 1998, which show the second-highest new car sales on record, had been "massaged" by as much as 400,000 sales.

According to the Society of Motor Manufacturers and Traders (SMMT), new car sales reached 2,247,402 in 1998 - a 3.5 per cent increase on the previous year and the highest figure since the peak year of 1989.

But Mitsubishi Motors estimated that 400,000 of these were "pre-registrations" - where dealers register the cars as sold before they have customers. If these were excluded the real sales figure for 1998 would be nearer 1.85 million.

Roger King, acting chief executive of the SMMT, defended the figures, saying that the year had ended with a sales flurry caused by successive interest-rate reductions, the arrival of new models and the deals on offer to customers.

December sales were 14 per cent up on the previous year. However, there was no respite for the embattled Rover car group, which saw its share of the UK market slip to a new low of just 6.6 per cent. Over the year, Rover only just managed to cling on to third place with a market share of 8.6 per cent, fractionally ahead of Renault and Peugeot.

Most foreign manufacturers made inroads into the UK market, helped by the strength of sterling, which has made imported cars cheaper. Last year the share of new car sales taken by imports rose to 68 per cent, and in December it topped 70 per cent.

The SMMT forecast that registrations this year would fall by 200,000 to 2.05 million - a decline of 9 per cent. This year the annual August numberplate letter change is replaced with two changes in March and September.