UK sales slump hits car giants

Ford and Vauxhall saw their share of the British car market slide last month as the industry reported a "dramatic" and unexpected slowdown in the sales figures.

The statistics, from the Society of Motor Manufacturers and Traders, showed registrations fell by 0.23 per cent in March compared with the same month last year, to 179,863. Between January and March sales have risen by just 18,500 to 549,534, with the bulk of the growth made in January.

Roger King from the SMMT said the slowdown "seemed to be in conflict with surveys showing retail spending picking up". One possibility was that buyers had been put off by the election uncertainty and the likelihood of higher interest rates whichever party wins power.

Privately manufacturers yesterday questioned the validity of the statistics, citing the early Easter break and a backlog of registration documents last week.

The figures continued the worrying surge in sales of imported cars established last year. In March imports accounted for 65.29 per cent of the market, up from 61 per cent in March 1996. At the same time the traditional volume makes, Ford, Vauxhall and Rover, all did badly. Ford's market share was worst hit, slumping to 16.9 per cent in March from just under 20 per cent. The US giant blamed the drop on radical changes to dealer bonuses, introduced in February.

From now on Ford dealers receive bonuses based on annual regional sales targets, instead of the monthly goals widely blamed in the industry for artificially inflating the figures.

A Ford spokeswoman said the picture was not as bleak as some in the industry had suggested. "The Mondeo is now the best-selling car in the UK. So far this year Ford has the top-three selling models. That's very good news."

Vauxhall's share of the market dropped from 15.5 per cent to 13.46 per cent, while Rover's share slipped by 1 percentage point, to 10.94 per cent. The main beneficiaries were European imported brands, with Fiat enjoying its best March since the 1970s, grabbing 4.6 per cent of the market. Volkswagen sold more than 9,000 cars in March, taking the German group's share to over 5 per cent.

Jay Nagley, from marketing consultants Quadrangle, said customers preferences had shifted. "People are moving away from volume brands to makes like Fiat and VW. On this basis BMW could be outselling Rover in five year's time."