New car sales leap but 2010 risks crash
Filed under: Economy, Personal Finance, Manufacturing, Retail
January saw a 30% lift in UK new car sales. Society of Motor Manufacturers and Traders (SMMT) boss Paul Everitt however warns that the next year will be tougher.There's several reasons for this. Last year's car market was hugely boosted by the scrappage scheme - a sort of quantative easing strategy for UK car sales supported by £400m of taxpayers' cash. This was due to be scrapped itself at the end of February but now runs to March.
Quota motor
Part of the reason for the extension is to fill up quotas. There's a 400,000-vehicle limit under the scrappage scheme. Currently we're at around 330,000 cars sold. So up to 70,000 cars could be potentially be sold up to March.The scrappage scheme has certainly been a huge prop for UK car sales. The SMMT estimates it single handedly was responsible for 20% of all new car sales last year.
Grim 2010?
But car sales for the next year will be hard going when the scrappage prop is removed. Demand could plummet to 1.82m cars, the lowest level since the early 1990s. Consumer debt levels remain high and job insecurity worries still abound.Disappointing though to see that the only car in the January SMMT top ten best seller list (see below) is built in the UK - the Vauxhall Astra. So more money flowing to foreign companies.
UK January best sellers
- Ford Fiesta - 8,861
- Ford Focus - 6,942
- Vauxhall Corsa - 5,786
- VW Polo - 5,786
- Vauxhall Astra - 5,072
- VW Golf - 4,388
- Peugeot 207 - 3,815
- Hyundai i10 - 2,949
- Audi A3 - 2,738
- Fiat 500 - 2,438
Links (opens in new window)
SMMT Jan sales report
Car sales rise by 30% in Jan - BBC
Scrappage scheme guide - Autotrader
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Reader Comments (Page 1 of 1)
2-06-2010 @ 5:47AM
Billybob said...
the scrappage scheme was another illusion because Manufacturers [ particularly FORD ] saw it as a green light to put up prices way beyond what was in the scheme.
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