UK: Car sales dip in October but another record year seen - report
British new car sales dipped 1.4% in October, the Society of Motor Manufacturers and Traders said on Thursday but, in a sign the industry is still roaring, it predicted another record year for sales, Reuters reported.
New car registrations totalled 181,589, the first annual decline since May, Reuters said, adding that sales were much lower than September's 439,365 but that is because September sees a licence plate change which boosts sales enormously.
The group reportedly said sales in the year to date were up 0.3% on the same period last year at 2,254,539 but, with car sales so far this year already the fourth highest total on record, the SMMT said it was raising its forecast for full-year sales to 2.565 million, just ahead of last year's record of 2.563 million, Reuters said.
Reuters noted that diesel market penetration in October was the highest on record at 29.7%, up from 26.7% in October 2002, and, after 10 months of sustained growth, the diesel market was on course for a record year, said the SMMT.
Full-year private registrations, meanwhile, are expected to be the highest since 1990 at around 1.25 million units, Reuters said, adding that the rest of the market is made up by fleet sales.
Reuters said that, after three years of record growth, higher borrowing costs could help cool an accelerating car market as the Bank of England earlier hiked interest rates 25 basis points to 3.75%, the first rise by any of the world's top four central banks in over three years, to curb consumer debt levels and booming house prices.
"There are strong arguments for a slowdown in consumer spending and that applies equally to car sales," Lehman Brothers UK economist Alan Castle told Reuters, adding: "While we are doubtful about how high the BoE can go in hiking rates aggressively, it is still something that could weigh on consumers' minds."
A SMMT spokesperson told the news agency higher rates could have an indirect impact on car sales.
"We expected the market to cool somewhat through 2003 and it hasn't...Clearly the fact that loan rates have gone up and that car sales have gone up for the last three years means there could be some cooling," she told Reuters.
Reuters said that, within the October rankings for individual cars, the Ford Focus recaptured the number one position for new car registrations, which it lost in September for the first time in 40 months to the Vauxhall [Opel] Corsa - the Focus sold 9,913 to Corsa's 7,995 and also remained well in the lead for the year-to-date.