Blog: 1966 and all that
Dave Leggett | 5 September 2008
Okay, August new car sales in Britain were bad. Very bad. And they should give people like the Chancellor Alistair 'we're doomed' Darling and the grandees on the Bank of England's interest rate review committee something to chew on.
And someone at the SMMT dug out an interesting stat: August sales this year were the lowest since 1966. What? How bad is that? It's certainly an irresistable stat - especially with the resonance that particular year has for many in England - and I can't blame anyone for wanting to use it. We're instantly transported back to Bobby Moore holding the Jules Rimet aloft, Swinging London in full swing and Twiggy in a Mini (skirt and car). The clear implication is that the national economy and the car market must really be in frighteningly rapid reverse.
Maybe Mr Darling is on the button with his 'sixty years' remark after all (no, he's not - and even if he was, he was ridiculously naive to say it publicly).
But just think of all those years since 1966 when the August car sales total was higher than August 2008. Were car sales higher even in the dark times of the oil shock 1970s, the 'gisajob' urban riot-strewn early 1980s or the sterling-ERM fiasco early 1990s, when the economic gloom was surely much worse than now - wasn't it...?
Hang on a minute.
To take a year at random from the 1970s, new car sales in Britain in 1976 (now that was a summer) were 1.285m units and the SMMT forecast for this year is still at a very much higher 2.26m units.
How could August 1976 sales be higher than 2008's in a very much smaller annual market? Answer: the distortion to monthly sales caused by the 'year identifier' in the new car registration plate.
It used to be a consecutive running letter at the end of the registration number and then it went to the beginning, but it was a very big thing in the UK to have the cache of the new year's letter on your brand spanking new car's plate and that came out every August.
In fact, over a fifth of annual new car sales happened in August. It was a huge marketing thing, but many in the industry said it was unhelpful and that they would prefer sales spread out a little more evenly over the year. In response, the registration number conventions were changed at the beginning of this decade (and now there are smaller peaks in March and September, but let's not get into that).
But the bumper August sales we used to get will never be repeated and August sales now are a lot lower than they used to be, even in the good years.
So, the stat is definitely an eye-catcher and I can see the 1966 thing being picked up in the national newspapers here today. But it's not quite as bad as it sounds because of that distortion which made Augusts bigger than they should have been in the intervening years.
A 2m unit annual car market in the UK was first reached in 1987. A market this year of 2.26m would still be pretty respectable by historical standards. In 1991 - the last big economic wobble in this country - we had a car market of 1.6m units. We're still some way off that nadir.
Ah, the joy of statistics.
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