Taxes will hurt car market recovery, federation warns

Click to follow
The Independent Online
THE Retail Motor Industry Federation has warned of a threat to the recovery in the UK car market as a result of increasing taxation, writes Mary Fagan.

The caution echoes industry fears that car sales in August, traditionally the strongest month, will fall far short of the 500,000 expected by some manufacturers.

Neil Marshall, RMI policy director, said: 'Over recent months we have seen clear signs of weakness returning to the market.' Where there is marked recovery, it is due to incentives offered to fleet buyers rather than retail sales, he said.

The RMI said that in the first seven months, sales in the West Midlands grew by 17.7 per cent while those in East Anglia rose by 7.8 per cent. In some areas, including Cumbria, Cornwall and parts of Wales, sales grew by less than 5 per cent.

New car registrations in the first 20 days of August grew by 0.5 per cent to 327,448 compared with the same period in August 1993. The figures, which have yet to be confirmed by the Society of Motor Manufacturers and Traders, are a blow to the industry, which had hoped for a month of booming sales. There are fears that the number of cars sold in the month as a whole will end up only slightly more than the 440,236 sold last August.