UK new car sales in 2010 rose 35,847 units to 2,030,846 units, ending the year 1.8% up on 2009 figures.
The fleet market rose by over 10% in 2010, but private volumes slipped following the end of the scrappage scheme (SIS).
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Registrations fell 18.0% in December to 123,817 units.
The market is forecast to decline by 5% in 2011 to 1.93m units as difficult market conditions continue.
“2010 was a year of recovery for the motor industry with new car registrations up 1.8% on 2009,” said Paul Everitt, SMMT chief executive. “Economic conditions remain extremely challenging, but industry expects demand to strengthen in the second half of the year.
“Competition in the retail sector will intensify as the industry seeks to re-balance demand across its new and used car and service and repair business. UK motor manufacturing recovered particularly well in 2010 and the outlook is for further steady growth this year.”
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By GlobalDataThe SMMT said 2010 was a tale of two halves, with volumes up 19.9% in the first half of the year, but falling 13.8% in the second half. The step change was a reflection of the removal of the government and industry funded scrappage scheme in March. Over 100,000 cars were registered through the scheme in 2010, around 5% of the total market. Whilst up 1.8% on 2009, the 2010 market was still the second lowest in the past decade and almost 375,000 units short of 2007 levels.
Registrations fell by 18.0% in December, with the market a little below expectations. If scrappage volumes were removed completely from the 2009 December tally, then the 2010 December figure would have been up almost 6,000 units or 4.8%.
Private registrations fell below 1m units for only the second time in the past decade, dropping by 5.6% over the full year and by 37.5% in December. Fleet volumes were more resilient and grew by 10.3% over the full year. Business demand also rose in 2010 after a 42.8% rise in December. Fleet volumes are expected to sustain the market in 2011, whilst private demand will fall further – in part reflecting the loss of the scrappage scheme.
UK-built cars outperformed the market, up 17.4% over year-to-date and 7.4% in December. The market share was the highest since 2005.
Diesel penetration also rose to a record 46.1%, in part helped by growth of MPV and dual purpose (SUV) segments, which have a high diesel penetration, as well as the slowdown in petrol car sales post scrappage.
The Ford Fiesta was the best selling new car for a second successive year in 2010 and Ford was again the best selling brand, while in December Vauxhall was the top brand and the Astra was the best selling model.
The Retail Motor Industry Federation said, with many manufacturers and dealers offering to absorb the cost of the 2.5% VAT increase, sales for January have the potential to benefit.
Sue Robinson, RMI Franchised director, said: “2010 has been a difficult year for dealers, but the sales are there, boosted greatly by scrappage. It’s very telling that Ford’s Fiesta is the top selling model, showing that consumers are seeking fuel efficient, good value cars.
“Dealers, aware of consumers concerns about the cost of servicing and maintenance, introduced a variety of deals. Vauxhall’s ‘lifetime warranty’ for example, saw the brand topping the sales chart in December, as consumers prepared to deal with the implications of government cuts and the knock on affects on their household budget.”
On 2011 prospects, Robinson said: “with the cost of fuel rising towards 130 pence per litre, the motorist has to think carefully before purchasing a car, taking into consideration the efficiency of the vehicle, its likely depreciation and, in light of the economic uncertainty, whether they’re willing to commit to finance deals.
“Dealers are indicating that interest in used cars is elevated. Furthermore, the value of this sector is amplified as consumers decide not to replace their new cars, meaning that there are less used cars on the market.”
“The first half of 2011 was always going to be challenging for car dealers, as consumers ascertain how the VAT increase, fuel price rises and the growing cost of other commodities such as bread, cotton and coffee, affect their household budgets.
“We are also mindful of the regional variations, with some areas of the country affected more significantly than others by the government cuts and general deficit reduction strategy.”
“However, dealers are aware of the issues affecting consumers, and there are offers available on forecourts, such as VAT freezes and various payment plans.”
December sales were, as with other retail sectors, affected by heavy snowfall which saw much of the country unable to make long or non-essential journeys, the RMIF noted.
