New car sales fall 9.5 Percent in May
Car dealers in for tough year
Sales of cars to private users fell 9.5% in May 2008 according to the SMMT year on year figures. Total new car registrations for the month were 179,272 for the month of May.
In line with industry expectations, private car buying has slowed dramatically as consumers tighten their belts. Small business is also feeling the pinch with a 15.4% fall in car purchases. The fleet sector increased sales by 3.1 percent to 96,588 units, but despite manufacturer denials, this is where the bulk of the pre-registered cars end up. Mass pre-registrations are rife as manufacturers dump unsold stock onto the market.
Small economical cars show huge increase. Sales of small cars increased by 120% with the Hyundai i10 the best seller in this sector. Diesel car sales continue to rise, now taking a 43.9% share of the market, up by 10.3%. Gas guzzlers are starting to feel the pinch with Land Rover sales down by 32% for the month and Porsche down by 38%.
Car dealers are expecting sales to decline further than SMMT predictions with dealers feeling that "market conditions are the worst they can remember". The general volume of new car sales is down by 220,000 cars since the peak 12 month rolling total of 2.62 million units in January 2004.
Whilst there does not appear to be much good news from these figures, the increase in sales of small cars shows that consumer concern over the state of their finances is at last leading to downsizing of cars. It may seem a paradox that AVF ( Alternative Fuel Vehicles) sales dropped by 8.3%, but this only reinforces that consumers will only switch to AVF cars if it makes financial as well as environmental sense.