Incentives fail to get new cars on to the roads

New UK car sales fell again last month as private buyers continued to shun the market despite massive incentives and promotional schemes run by manufacturers.

Sales fell 0.87 per cent in March to 180,275, from 181,849 in same month last year, with fleet sales recording a 3.9 per cent gain, according to the Society of Motor Manufacturers and Traders.

Roger King, SMMT director, said: "Once again these figures reveal growth in the fleet and business sector, wholly offset by the decline in private purchasing." Private sales fell 6.6 per cent, a decline which Mr King said was a cause for concern.

Ian Shepherdson, UK economist at HSBC, said that manufacturers were raising car prices above the level of inflation. "The trend in sales does now seem to be downwards in contrast to the recent improvement in the housing market and retail sales," he said.

"The problem with new cars is almost certainly that, as the Retail Motor Industry said last week, they are too expensive. Prices have risen by 4 per cent over the past year. Sales will therefore continue to struggle this year."

Mr King said that the recent reports that UK and European car prices were higher than those in the US were "misleading" as they were not comparing like with like.

"The reports have done nothing to build consumer confidence, which can only be encouraged by both manufacturers and retailers working together," he said.

New car registrations for the first quarter were up 1.08 per cent at 531,049 compared with 525,364 in January to March 1995. Ford remained the clear market leader, selling 35,534 cars in the month for a 19.71 per cent market share, although this was down from 21.22 per cent a year earlier. General Motors' Vauxhall division was in second place with 28,006 registrations, 15.54 per cent of the total.

Meanwhile, car fleet operators yesterday launched a campaign to secure the abolition of separate delivery charges for cars and vans bought in the UK.