labels: Cars, World economy
New car sales plunge again in April in UK news
12 May 2009

New car sales continued to decline for the 11th consecutive month in the UK last month, and registered the lowest April sales in the in the last 18 years.

With recession continuing to grip the UK and consumers going slw on big-ticket purchases, new car sales for the month fell 24.0 per cent.

On the brighter side, the sales at 133,475 new vehicles beat analyst's forecasts of 118,000 vehicles. Even so, the sales "records the 11th successive fall in new car registrations, yet the UK motor industry continues to demonstrate its strength and resilience throughout,'' said Paul Everitt, SMMT chief executive. 

According to data released by the Society of Motor Manufacturers and Traders (SMMT), in the same month last year 175,668 were sold.

In March, the UK car production slumped by 51.3 per cent, a slight improvement compared to the decline of 59 per cent in February and the total production of cars for the first quarter had come down to 56.6 per cent. (See: UK auto production plunges in March)

Last month, the SMMT had said that the overall new car market is likely to fall to 1.72 million units this year from 2.13 million in 2008 and 2.4 million in 2007.
The April month saw sales falling for all types of vehicles, although the decline for vehicles within the fleet market was slightly less at 21.8 per cent.

Diesel vehicles slipped for the second time this year, although remains higher at 44.2 per cent compared with 42.7 per cent in 2008 over the first four months of the year. Only the mini segment rose in the month, up 54.3 per cent.

The Ford Focus returned to the top spot in the best selling model list for the first time since July 2008 while the Ford Fiesta remains the UK's best seller over the year-to-date.

Like the US, where auto sales declined 34 per cent in April, the US industry experts believe that it could possibly be the bottom of the barrel and things could only start getting better, (See: Amid April decline US automakers see revival signs) the UK auto industry feels that same, more so with the introduction of the scrappage scheme.
SMMT feels that the UK auto market will see an increased demand after 18 May, when the UK government's scrappage scheme comes into effect.

The UK government, in its budget last month, had announced a vehicle scrappage incentive scheme, where consumers could trade their vehicles bought before 31 August 1999 for new cars at a rebate of 2,000, with the UK government giving 1,000 and the car manufacturer 1,000.

''Despite the tough conditions, industry is hopeful that its prospects will improve in the coming months and the steps it has taken will provide the basis for a sustained recovery once growth returns. The UK motor industry remains of strategic importance and will play a key part in generating jobs and prosperity into the future,'' said Everitt.

But the British car industry is mired in controversy and uncertainty.  The negotiations between JLR and the UK government has hit a roadblock with the government putting onerous and humiliating conditions for underwriting the loan to JLR from the EIB. (See: UK government dictates terms for JLR loan)

There is also the possibility of Fiat closing the lossmaking Vauxhall's two plants in the UK, if it takes over Vauxhall's parent company, General Motors Europe, which is being hived by GM in order to prove its viabilty to the US government by 1 July.

Fiat is reported to be cutting costs and bring savings of 1.25 billion by 2015, and unions fear that the only way to achieve this, is by closing plants or axing workers.

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New car sales plunge again in April in UK