Rise in car sales fails to lift gloom

NEW car sales failed to pick up decisively in June, rising by only 4.4 per cent on the same month last year.

Although this was the third month in succession that year-on- year registrations had increased, sales for the first half of the year remained 4.1 per cent down on the same period last year.

Manufacturers are pinning their hopes on a big increase in sales in August, when K-registered cars go on sale, if the market is to equal or surpass last year's total of 1.59 million.

According to the Society of Motor Manufacturers and Traders, June sales reached 102,566 compared with 98,204 in the same month last year, taking the half- year figure to 768,745.

However, Sir Hal Miller, the society's chief executive, warned: 'This welcome increase in June would need to be repeated every month until the end of the year if the industry is to match last year's total.'

Sales in July are likely to be subdued in the run-up to the introduction of the new letter prefix, which manufacturers hope will result in 400,000 registrations.

If August sales do not hit that level car makers fear the market for the year will fall to as little as 1.55 million.

The downward trend in sales was halted in April when they grew by 9.1 per cent - the first year-on-year rise for 30 months. However, the increase was distorted by the rise in VAT to 17.5 per cent the previous April.

In May the market grew by only 1.4 per cent despite the halving of special car tax to 5 per cent in the Budget.

Ford retained market leadership in June with 20.66 per cent. Vauxhall stayed in second place with 16.2 per cent but Rover's share slipped below 14 per cent.