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November 6, 2012 10:46 am
Britain’s car industry bumped up its forecast for vehicle sales to more than 2m this year after a double-digit jump in vehicle sales in October.
A total of 121,252 cars and commercial vehicles were registered last month, 12 per cent more than a year ago, underscoring the UK car market’s resilience despite the debt crisis and the sharp downturn in demand for cars in Europe.
“Despite uncertainty in the European economy, the UK new car market continues to grow, with registrations rising more than 12 per cent in October to 151,252 units,” Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, which represents UK-based carmakers, said.
The SMMT revised upward its full-year forecast for registrations to more than 2m units, from 1.97m previously, and higher than the 1.94m registered in 2011.
Britain’s car market has grown by 5 per cent so far this year to 1.8m units, growing every month except February.
Registrations of cars in the European Union fell by 8 per cent in the year to September, the latest month for which figures are available.
As in previous months this year, private buyers were responsible for most of the rise in UK registrations of new cars in October, up 24 per cent on a year ago. Registration of new vehicles by fleet customers rose by 5 per cent year on year, while businesses registered 3 per cent fewer vehicles than a year ago, the SMMT said.
Some analysts said the surge in registrations might attest to reviving consumer confidence as the job market improves and inflation falls.
“Following the disappointing British Retail Consortium survey for October, the strength of private car sales in October gives a lift to hopes that consumers are becoming a bit more prepared – and able – to spend,” Howard Archer, economist with IHS Global Insight, wrote in a research note.
However, industry participants say that the numbers reflect in large part supply dynamics and discounts on a crisis-stricken European car market, rather than underlying consumer demand.
Many carmakers are shifting more vehicles from Europe to the UK and selling them at deep discounts to take advantage of a favourable pound-to-euro exchange rate, or because they think they have greater chances of selling them here.
Some UK car dealers are pre-registering vehicles, meaning they buy the cars themselves and sell them on to customers as “nearly new”, also at discounted prices.
“The UK figures include substantial numbers of both pre-registrations and manufacturer early registrations, which are not sustainable in the longer term,” wrote David Raistrick, UK manufacturing leader at Deloitte. “Stripping these out would show a very different picture in the UK.”
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