Car sales crash as private buyers desert forecourts

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The Independent Online

Registrations for 2005 were down by 5 per cent to 2,439,717 and are forecast to fall by a further 2.7 per cent in the coming 12 months.

The Society of Motor Manufacturers and Traders blamed the slowdown on private buyers deserting the forecourts as the economy slowed and household spending contracted. Sales to private buyers, as opposed to fleet and business customers, slumped by more than 10 per cent.

The one shaft of light was a rise in registrations in December - the only month of the year to show an increase. But the SMMT put this down to a huge jump in sales of diesel-engined models as company car buyers rushed to take advantage of a tax break which ran out at the end of the year. The December surge enabled diesel cars to take a record 45 per cent of the market for the month and 37 per cent for the year.

Christopher Macgowan, the SMMT's chief executive, described the year-end total as "respectable" given the state of the economy but he went on to caution: "We expect 2006 to be another tough year for the industry."

Most of the big car makers saw their sales fall with Ford, the market leader, down by just over 5 per cent and Vauxhall's registrations more than 2 per cent below the previous year. The German car maker BMW had a good year, however, with record UK sales of more than 156,000 cars. Registrations of BMW-badged models rose by 9 per cent while sales of the Mini were up by more than 2 per cent at 43,660.

The demise of MG Rover, which collapsed in April, accounted for more than one- third of the downturn in sales in 2005 when there were 127,000 fewer cars registered. Sales of Rovers slumped by 30,000 to a little less than 15,000 while MG sales more than halved.