UK dealers have been pulling out the stops to shift new cars for the manufacturers

UK dealers have been pulling out the stops to shift new cars for the manufacturers

The UK car market continues to surprise and was up by 14.2% year-on-year in October. It looks good. There are a few things to note.

For one thing, people in the industry say it is very, very competitive. So, unit sales may be up, but making money is another matter. Britain's car market is led by Ford but Ford has a share of just 13% so far this year. Vauxhall is next on just under 11% and then there's a very long tail.

That said, the euro/sterling exchange rate has moved in the right direction over the past year or so (due to economic divergence), with the euro depreciating versus sterling by around 8%. If margins are tight to start with on vehicles shipped from the continent to the UK, that kind of swing can really help.

There's also the matter of the sluggish eurozone economy and market. While demand on the continent remains weak, manufacturing more for the UK car market is one way to deal with the problem of keeping plants running. The capacity adjustment since 2008 is way smaller than the decline to the market - overcapacity is out there and there is pressure to keep plants busy, somehow. The UK market is seen as a good outlet.

The French car market was down 4% in October. Confidence remains fragile across the region. Unemployment remains worryingly high in a number of countries with little prospect of significant reduction in the forseeable future. If there's growth in southern Europe, it's coming off a very low base. The latest news suggests that Europe will be staying economically sluggish for a while longer and that the European economy's position has deteriorated over the past six months. The European Commision's latest economic forecasts have just been revised down with eurozone area economic growth in 2015 forecast at just 0.8% (previously forecast in the spring at 1.7%).

This from the EC's latest report on the state of the EU's economy: "After just a year of moderate growth, the momentum of the EU economy began to slow in spring 2014. In the second half of this year, GDP growth in the EU is set to be very modest, while in the euro area it will almost stagnate."

So, what does that say for the UK car market outlook? Well, maybe PCPs and the retail push is nearing its limits. However, another year of depressed sales in mainland Europe does point to the current push of volume into the UK being maintained. The market is running at circa 2.5m a year, maybe 10% above what was considered a 'normal' market pre-2008. It's hard to see growth on that high level. But the market could well tick over not far off that level in 2015. Good volume at a time when volume remains very low in neighbouring countries. But it's still going to be highly competitive and much depends on how that exchange rate moves in terms of short-term financial gains for the OEMs.

UK car sales by make, month of October and first ten nonths

  OCTOBER % Change YEAR-TO-DATE % Change
MARQUE 2014  % Market share 2013 % Market share 2014 % Market share 2013 % Market share
Abarth 117 0.07 100 0.06 17.00 1,403 0.07 1,214 0.06 15.57
Alfa Romeo 356 0.20 416 0.26 -14.42 4,820 0.23 4,912 0.25 -1.87
Aston Martin 55 0.03 66 0.04 -16.67 750 0.04 791 0.04 -5.18
Audi 12,893 7.17 10,720 6.81 20.27 139,380 6.52 124,981 6.40 11.52
Bentley 131 0.07 115 0.07 13.91 1,291 0.06 1,056 0.05 22.25
BMW 10,558 5.87 8,493 5.40 24.31 124,078 5.80 113,806 5.83 9.03
Chevrolet 10 0.01 700 0.44 -98.57 2,774 0.13 10,682 0.55 -74.03
Chrysler 108 0.06 139 0.09 -22.30 1,781 0.08 2,376 0.12 -25.04
Citroen 5,748 3.20 5,211 3.31 10.31 72,290 3.38 68,984 3.53 4.79
Dacia 2,047 1.14 1,442 0.92 41.96 20,630 0.96 13,073 0.67 57.81
Fiat 4,646 2.59 4,096 2.60 13.43 58,427 2.73 51,683 2.65 13.05
Ford 24,221 13.48 21,325 13.56 13.58 286,975 13.42 270,342 13.85 6.15
Honda 3,028 1.68 3,641 2.31 -16.84 47,130 2.20 49,135 2.52 -4.08
Hyundai 5,892 3.28 5,509 3.50 6.95 71,456 3.34 66,719 3.42 7.10
Infiniti 53 0.03 40 0.03 32.50 644 0.03 345 0.02 86.67
Jaguar 1,127 0.63 944 0.60 19.39 15,754 0.74 14,200 0.73 10.94
Jeep 398 0.22 342 0.22 16.37 3,242 0.15 1,800 0.09 80.11
Kia 5,981 3.33 5,103 3.24 17.21 68,519 3.20 63,410 3.25 8.06
Land Rover 3,695 2.06 3,965 2.52 -6.81 49,178 2.30 47,881 2.45 2.71
Lexus 1,096 0.61 719 0.46 52.43 9,725 0.45 7,769 0.40 25.18
Lotus 8 0.00 28 0.02 -71.43 188 0.01 169 0.01 11.24
Maserati 97 0.05 32 0.02 203.13 1,018 0.05 271 0.01 275.65
Mazda 2,336 1.30 1,779 1.13 31.31 33,709 1.58 27,806 1.42 21.23
Mercedes-Benz 8,741 4.86 8,346 5.31 4.73 107,837 5.04 94,970 4.86 13.55
MG 188 0.10 36 0.02 422.22 2,028 0.09 309 0.02 556.31
Mia 0 0.00 5 0.00 -100.00 5 0.00 5 0.00 0.00
MINI 5,262 2.93 3,904 2.48 34.78 41,846 1.96 44,168 2.26 -5.26
Mitsubishi 1,784 0.99 439 0.28 306.38 12,946 0.61 7,855 0.40 64.81
Nissan 11,934 6.64 8,346 5.31 42.99 118,824 5.56 102,887 5.27 15.49
Perodua 0 0.00 9 0.01 -100.00 27 0.00 202 0.01 -86.63
Peugeot 5,867 3.26 6,859 4.36 -14.46 91,285 4.27 92,878 4.76 -1.72
Porsche 948 0.53 715 0.45 32.59 7,431 0.35 6,736 0.35 10.32
Proton 0 0.00 2 0.00 -100.00 1 0.00 20 0.00 -95.00
Renault 4,754 2.65 3,761 2.39 26.40 55,486 2.60 36,081 1.85 53.78
Saab 2 0.00 0 0.00 0.00 3 0.00 3 0.00 0.00
SEAT 3,450 1.92 2,903 1.85 18.84 46,061 2.15 38,371 1.97 20.04
Skoda 5,078 2.83 5,641 3.59 -9.98 65,464 3.06 55,217 2.83 18.56
smart 183 0.10 365 0.23 -49.86 4,199 0.20 4,681 0.24 -10.30
Ssangyong 127 0.07 62 0.04 104.84 1,342 0.06 567 0.03 136.68
Subaru 216 0.12 105 0.07 105.71 2,356 0.11 1,862 0.10 26.53
Suzuki 1,744 0.97 1,369 0.87 27.39 33,175 1.55 28,556 1.46 16.18
Toyota 6,233 3.47 5,963 3.79 4.53 82,288 3.85 78,794 4.04 4.43
Vauxhall 19,005 10.58 18,116 11.52 4.91 229,362 10.73 218,473 11.19 4.98
Volkswagen 15,495 8.62 12,594 8.01 23.03 184,157 8.61 167,130 8.56 10.19
Volvo 3,946 2.20 2,772 1.76 42.35 34,730 1.62 27,623 1.41 25.73
Other British 64 0.04 34 0.02 88.24 688 0.03 678 0.03 1.47
Other Imports 92 0.05 43 0.03 113.95 1,207 0.06 767 0.04 57.37
Total 179,714   157,314   14.24 2,137,910   1,952,238   9.51

Source: SMMT