labels: World economy
New car sales in UK plunges further in May news
04 June 2009

New car sales in the UK continued to decline for the 13th consecutive month in May, with sales falling 24.8 per cent from last May and by 0.8 per cent more compared to last month's fall of 24 per cent. (See: New car sales plunge again in April in UK)

The Society of Motor Manufacturers and Traders (SMMT) today said that new car registrations fell 24.8 per cent in May to 134,858 units and registrations over first five months of 2009 down 289,598 units or 27.9 per cent.

SMMT chief executive, Paul Everitt said, ''While consumer confidence is improving, the UK motor industry is still facing a difficult economic climate but we have seen an encouraging start to the scrappage incentive scheme with 35,000 orders being placed since it was announced, although it will take time to feed into registration figures.''

The scrappage incentive scheme came into effect on 18 May and since then, over 35,000 cars were sold with two weeks, the UK government had announced on 28 May. (See: UK government's car scrappage scheme a hit)

The SMMT however noted that it would take some time for those orders to translate into registrations. As details of the scheme were finalised, it said that some consumers may also have been holding off purchasing a car, awaiting the best deal.

The UK government, in its budget last month, had announced the vehicle scrappage incentive scheme, which would start on 18 May, enabling consumers to trade their vehicles bought before 31 August 1999 for new cars at a rebate of 2,000, of which the UK government would give half and the manufacturer the other half.

The scheme is designed to run until March 2010 or until all the funds allocated for the scheme are used up.

Over the first five months of the year, the market is down almost 290,000 units, and on a rolling annual basis down 555,663 units to 1.842 million units.

The fall was across the board on all types of sales although in May private demand was down a relatively modest 13.8 per cent. SMMT said that in part this reflects the fall in private demand last year, but is also likely to be an early sign of revival under the scrappage scheme.

Diesel penetration fell for a second successive month, from 44.8 per cent in May 2008 to 44.0 per cent this May. This reflects the shift towards smaller cars, which tend to be petrol engined. The mini segment was the only segment to record volume growth, up 50.3 per cent.

The supermini segment saw market share rise, from 32.2 per cent to 34.6 per cent, and Ford's Fiesta was again the overall market's best seller in both the month and year-to-date.

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New car sales in UK plunges further in May