Days numbered for car scramble: As the mad rush for the latest car registration gets underway again tomorrow, William Kay explains why the motor industry needs to find a better way

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SO FAR this year, British motorists have bought a million cars. By the end of August, another 500,000 new cars will be on the road.

Yes, the annual scramble is under way to buy a car with the latest prefix on the number plate. Tomorrow the prefix changes from L to M, instantly outdating any car already registered.

In recent years, the scramble has intensified to the point where a quarter of all cars sold this year will be driven out of the showrooms next month - and perhaps as many as half will be claimed by their eager owners this week.

Yet, as one industry insider pointed out: 'It is crazy that if you buy an L-reg car today and your neighbour buys an M-reg car on Monday, when you come to sell them next year yours will be worth several hundred pounds less than your neighbour's'

That has revived calls for the annual number plate system to be scrapped in favour of a system that spreads demand more evenly through the year.

For the second time in nine years, the Society of Motor Manufacturers and Traders has launched an inquiry into the system, with a view to coming up with an alternative that will please as many people as possible. But the signs are not promising: the 1985 search proved abortive.

The motor trade rubbed its hands gleefully in the 1960s, when the public seized on a simple means of extending the possible range of number combinations and turned it into a fashion item.

At first, it seemed no more than a harmless excuse for snobbery and one-upmanship, much like the creation of the 071 central London telephone exchange in 1990.

But as the August proportion of car sales has surged remorselessly to its present levels, the UK motor industry has been tying itself in knots. Even company fleet buyers have been getting in on the act, with an eye on resale values.

'It's not healthy for the marketplace,' said John Gardiner, spokesman for the British end of the Ford Motor Company. 'We have to look four or five months before August, not only at the likely total size of the market, but also at the mix of vehicles that are going to be wanted. In a world moving towards leaner production methods, this is a real burden.'

Nevertheless, in a market where advertising costs alone add pounds 280 to the price of every car, the burden of extra storage and overtime on factories and forecourts can total as much as pounds 1,000 per car, according to Cowie Group, the dealer based in Sunderland.

Iain Jane, managing director of the Cowie motor division, pointed out: 'In the run-up to August, dealers sustain substantial overhead out of all proportion to the rest of the year. They have to stock and safeguard three times their normal numbers of new cars, deal with staffing problems during the UK's peak holiday period and ensure that every customer gets sufficient care and attention.'

The impact of the recession has raised the stakes. Every company, especially in an industry selling goods as expensive as cars, is far more conscious than in the 1980s of what extra carrying-costs can do to a business plan.

A spokesman for the SMMT said: 'The particular problem has been the switch to just-in-time delivery of components. That depends on a regular production line. That is apart from stockpiling production, when dealers and manufacturers have to hire extra warehouses and airfields.'

BMW, the fashionable German manufacturer, stores its imports at a 52-acre pound at Thorn in Yorkshire, after they come through the port of Immingham from Zeebrugge. However, from mid-June to mid-July the company takes an extra 30 acres to cope with the August rush.

'We will have sold perhaps 400 cars in July,' said Tom Purves, managing director of BMW (GB), 'and will sell about 12,000 in August. But Continental manufacturers like building cars for delivery then, because it is a slack month everywhere else.'

The August peak used to put pressure on components manufacturers, but modern production methods and more diverse outlets make that less of a problem.

'It's something we allow for year by year,' said a spokesman for Lucas Automotive.

At its factory in north-west France, it has reduced the time taken to make a brake unit from a week to three hours.

It is harder for car manufacturers to avoid the need to stockpile cars in the month leading up to mid-July, when they begin to be taken round the country to the dealers in enormous 10-car transporters.

However, the biggest pressure falls on the dealers. They have the task of receiving the new cars, storing them, adding accessories, making final checks and either delivering them to customers or funnelling them through the showrooms.

And that is on top of the cost of the inevitable pre-August special offers, launched in an effort to offload the last of the older models. Cash returns, interest-free loans and free insurance are showered on anyone incautious enough to wander near a forecourt.

'Ideally I would like to change this way of thinking,' said John Abbott, head of marketing at Volkswagen, 'but we have to play the game like everybody else.'

In the first four or five days of this week, busy dealers will be selling as many as 500 cars. It is a burden that worries some manufacturers, who are concerned that customers may be trampled in the rush.

So BMW's Mr Purves, in his role as chairman of the SMMT's car section committee, is heading the latest review into the annual licensing system.

'It's one of the most difficult things to come to a solid conclusion about,' he explained, 'because it's partially emotional and considerably subjective. It can be difficult for people to admit to an element in their own ego. But people are proud to have a car with the latest letter.

'The annualised plate suits the police, because it helps witnesses to identify cars. They say they have seen an L-registered Volvo rather than just a Volvo.'

But the Association of Chief Police Officers insisted that they are willing to consider other means of identifying cars.

John Deal, the association's representative, said: 'Registration plates have important roles to play in crime detection. I don't think that the annual plate is the be-all and end-all. If other people are moving the debate, we would want to play in part in it.'

Britain's system, with all its spin-offs, is on its own. In Switzerland, motorists pay the tax on the plate, which stays with the owner rather than the car. German and French number plates carry local-area recognition and a tiny sticker to say the licence has been paid. And in the US, virtually anything goes in some states, as long as each number is unique.

Ideas being mooted are:

To retain the annual letter but change it at random on a different month each year;

To keep each prefix letter until all the letter/number combinations are used up, however long that takes;

To copy the Swiss system of tying the plate to the driver, not to the car;

To scrap prefixes and go back to regional numbering, as in France and Germany.

But one prediction is reasonably certain - that the present system is doomed.

(Photograph omitted)