Car market rises in February, ahead of key ‘new plate’ market
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The new car market in the UK rose for an eighth successive month in February, with the market up 26.4% to 68,686 units, almost one in five (19.6%) accounted for by the government's scrappage scheme. Between 1999-2009 February typically accounted for 3.3% of the annual market, ahead of the March plate change peak. The 2010 February market was above expectations, just 1.3% below 2008's tally, but still 12.2% off the 1999-2009 average.
"Scrappage has generated eight consecutive months of growth in the new car market and we expect its benefits to stretch beyond the scheme's closure later this month," said Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT). "Industry continues to face challenging market conditions, but positive trends in the fleet and business sectors suggest that negative impacts can be minimised. Strengthening business and consumer confidence remains industry's priority. A clear and consistent approach to CO2 based taxation and improved access to affordable credit are essential elements in sustaining recovery in the new car market."
David Raistrick, automotive partner at Deloitte, said that compared with last year, the automotive industry was off to a strong start in 2010. "The scrappage scheme can once again be credited with being the driving force behind the surge in demand. However, scrappage has only boosted the private buyers' market and we now need to see an improvement in the fleet market in order for growth to be sustained.
"I predict that the rush for new registration plates, combined with the final month for scrappage, will protect new car sales in March. Looking ahead to the remainder of 2010, it is likely that, with anticipated price rises due to the weakness of sterling, the end of scrappage, and the possibilities of new showroom taxes and a rise in VAT to 20%, new car sales will plateau. Only a strong economic recovery, with associated new corporate sales, will allow new car registrations to end the year at the 1.9-2 million unit mark.
"As scrappage comes to an end, the automotive industry is increasingly looking toward green subsidies to help stimulate demand."
SMMT said it expected volumes to push above 360,000 units for the new '10' plate. Over the past decade, March has been the strongest month for new car registrations, accounting for 17.8% of annual registrations.
Final orders through the scrappage scheme must be made by the end of March, or sooner if funds run out.
