UK automotive sector evades European gloom

The UK's new car market has increased 5.0% over the year-to-date, growing in all but one month, totalling 1,771,861 units. This represents an increase of 83,823 units on a year ago. The latest figures caused the Society of Motor Manufacturers and Traders (SMMT) to revise its forecast for the full year to over two million units, from 1.94 million in 2011. SMMT Chief Executive Paul Everitt said it was encouraging to see the alternatively-fuelled vehicle market performing strongly, even though it represented only a small share of the overall market. David Raistrick, UK manufacturing leader at the business advisory firm Deloitte said: "The UK continues to lead the way in European new car sales, with the main continent's decline triggering unease in global automotive manufacturers. "On the one hand, a number of major UK dealer groups have reported strong sales growth in 2012, but their counterparts in Europe are witnessing a decline. This is particularly uncharacteristic in Germany, where a double digit contraction in September 2012 for new cars and a 2% reduction overall for the year will instigate some very serious dialogue in the boardroom. "Commentators continue to point toward the Chinese market as a key growth area for manufacturers but have neglected the fact that the majority of cars sold there are manufactured in China itself. Of the 14.5 million new cars sold in China in 2011, 832,000 (less than 6%) were imported. Most of the major manufacturers have at least one production facility in China, mostly operating as joint ventures with Chinese automotive manufacturers. "With the decline in the European market, there has already been abundant rumours and confirmed plant closures in the past few weeks, with manufacturers actively seeking to restructure their European production facilities to quell overcapacity in the market."