January car registrations see double-digit fall and tough times ahead

The fall was "in line with SMMT forecasts and marks the beginning of a challenging year for the UK motor industry," said the Society's chief executive Paul Everitt (pictured). "Consumer confidence is low and it is important that government uses the March Budget to help relieve some of the financial pressure on motorists by freezing fuel duty, while providing stability and certainty on motoring taxes. Despite the challenging conditions, the demand for low CO2 emitting and highly fuel efficient cars continues to grow." Commenting on the figures, David Raistrick, UK Manufacturing Leader at Deloitte said: "Today's figures are disappointing but not surprising. This time last year, the scrappage scheme was in place so we are not really comparing like with like. Compared with January 2009, last month's figures actually increased by around 15%, however, it should be remembered that 2009 was the point at which the industry was crying out for help. "Nevertheless, 2011 will be tough for motor manufacturers. We do not expect sales to go beyond 1.9 million and they may struggle even to reach 1.85 million, which would be one of the lowest new vehicle sales years in the last decade. Public sector buying is reducing and private consumers are keeping their cars for longer. "The real acid test will be the March registrations, but there are no early signs of these providing the required boost. The low value of sterling and the recent VAT rise have combined to put real pressure on pricing, particularly for imported cars. "The very low registrations we have seen in recent years means that as the year progresses the residual value of cars will hold up well. Coupled with new car sales being limited, this will lead to a buyer's market for those wishing to sell their three year old cars for new ones, with good deals on both new cars and part exchange prices."