Mark Ovenden, Ford Britain chairman and MD, has told just-auto that continued low interest rates are key to maintaining the UK car market at its current high level.
Data from the Society of Motor Manufacturers and Traders (SMMT) showed April registrations up for the 38th consecutive month. Demand rose by 5.1% to 185,778 units – the month’s best performance since 2005. Year to date registrations for 2015 are up 6.4% to 920,366. Last year the UK car market was up over 9% to just under 2.5m units, a historically high level at a time when car demand on the European continent has slumped.
Economists say that continued low inflation (the latest official data issued today shows a slight fall in UK consumer price inflation to -0.1% in the year to April), points to interest rate rises being some way off and that any increases later this year or next year will be gradually implemented.
Ovenden believes that the election result has removed some uncertainties for the UK economic outlook and interest rate prospects. “UK car sales have grown consistently for more than three years,” says Ovenden.
“Now the dust is settling on the general election result, the most positive short-term consequence is relative economic stability. For car and van customers who waited for May 7 to come and go, in order to assess the impact on interest rates before buying, business has resumed and we are now heading towards our May targets.”
He also stresses the importance of interest rates now that so many retail and business buyers buy through finance schemes such as PCPs (personal contract purchase) plans. “The SMMT’s 2015 car market forecast of 2,565,000 car sales is achievable with continued low interest rates. This is key for us as the majority of our retail customers fund part of their purchase with our in-house Ford Options finance plans.”
Ford in Britain is focusing on SUVs, performance cars and the van market, he says.
“Ford will be building its leadership of the car market with a focus on two growing segments – SUVs and performance cars. Come the end of this year, Ford will be the only volume manufacturer with small, medium and large SUVs with our EcoSport, Kuga and Edge sport utility vehicles. Ford’s sporty ST cars, spanning Fiesta and Focus, five-door and estate, petrol and diesel, will eventually be joined by an all-new Focus RS.
“The van market is up around three times the rate of car [market] growth. Here our Transit brand – 50 years old this year – dominates with a four-model range spanning Transit Courier, Transit Connect, Transit Custom and the two-tonne Transit jumbo. Commercial vehicle operators need a specialised dealership network element, which is where our 105 Transit Centres opened this year provide the required back up.”
