Hefty fall in October car registrations ‘disappointing’

The 2010 October market was 2.4% ahead of the low of 2008, and on par with the 2009 market if all scrappage volumes were excluded. In October 2009 scrappage represented 21.9% of the market, with 37,000 units. SMMT chief executive Paul Everitt (pictured) said the industry expected the coming months to be challenging with slow, but steady, economic growth feeding through to improved confidence and demand during 2011. October registration for vans – often seen as a bellwether of the small business economy – continued to rise; up 14.3% to 18,147 in October and to 215,902 for the rolling year. Truck registrations rebounded in October but remain 18.8% over the rolling year. Commenting on the latest figures, David Raistrick, automotive partner at Deloitte, said the fall in car registration figures was disappointing, although not surprising as it would have been difficult to beat last year's figures which were boosted by scrappage and up 32% on 2008. "The increase in VAT, effective from 4 January 2011, is another blow for the automotive industry, making it more expensive for consumers with the rise leading to an increase of nearly £500 to the cost of a typical new family car," he pointed out. "However, the flip side of this is that consumers may look to purchase cars in November and December in order to avoid this additional cost. Manufacturers also remain committed to meeting their end-of-calendar-year targets and will be encouraging sales to dealers in the lead up to year-end. "While it is virtually certain that the industry will exceed the two million unit mark in 2010, 2011 is going to be a very tough year. With consumer and business confidence still unsettled, private sales are likely to remain flat or even decline and the corporate sector is unlikely to invest heavily in fleet cars. A drop off in new vehicle sales during 2011 to closer to the 1.8 million unit mark looks likely."