New car registrations fall

The latest data revealed a drop of 7.9% compared with March 2010, but came as no surprise as March last year was the final month of the old vehicle scrappage scheme introduced by government to boost an ailing automotive sector. Commenting on the new registrations decline, David Raistrick, UK manufacturing leader at Deloitte, said that with scrappage accounting for around 13% of new vehicles in March 2010, the fact that sales had only fallen by 7.9% suggested the figures may not be quite as bad as it would first seem. "Indeed, the SMMT report that with scrappage volumes excluded, sales in March increased by 5.9% on 2010," he observed. "However, it should also be remembered that the net of scrappage numbers reflect historically low sales volumes, so an element of increase from this base was expected. Current figures still show new vehicle registrations below their long term average. Raistrick believes the industry continues to face underlying challenges including a trend to increase the length of ownership across the corporate sector as spending is reduced. In the private sector, a lack of consumer demand, because of fears over job security and inflationary factors, was also having an impact. And with new car sales having reduced several years ago, there was now a limited supply of nearly new used cars whose residual values are expected to increase as the year progresses, making used cars more expensive for consumers. However, Raistrick concluded that one bright spot was the continuing trend toward lower emission vehicles, with the SMMT confirming that Q1 reported the lowest ever average new car CO2 emissions. "I believe that the UK now has the lowest average automotive carbon emissions of the developed world," he said.