The UK new car market grew by 8.2% to 359,612 units in September, according to data released by the SMMT.

The strong market last month coincided with a registration plate change.

The UK car market has increased 4.3% to 1,620,609 units in the first three quarters of 2012, up 67,515 units.

The UK is alone in the ‘Big Five’ European national car markets in posting significant growth during the month of September.

“The important September plate change market outperformed expectations with new car registrations increasing more than 8% on last year to 359,612 units,” said Paul Everitt, SMMT Chief Executive. “Although the economic outlook remains challenging, we are starting to see a tentative return of consumer confidence as motorists explore new products and the latest fuel-efficient technologies.”

Some industry observers are hinting that continental European manufacturers are continuing to take advantage of the UK’s relatively buoyant demand and a favourable sterling-euro exchange rate to ship more cars to their UK dealers (with ‘pre-registrations’ also a part of the picture).

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John Leech, UK head of automotive at KPMG, estimates that pre-registrations have overstated the UK car market by around 5% so far this year.

“So why are sales of cars much stronger than other big-ticket, luxury purchases by consumers?  The answer is that the carmakers are encouraging dealers to register the vehicle before they have arranged a sale to consumers by offering dealers pre-registration bonuses.  Dealers then tend to offer these cars to consumers as nearly-new but they are included in the official new car sales figures.  KPMG’s estimate is that the new car sales figures for the year are approximately 5% overstated by pre-registrations which suggests that the overall market has actually been flat year-to-date.”

“The Supply of New Cars Order 2000 requires carmakers to disclose the number of pre-registered cars included within their sales but so far the industry has only disclosed a tiny number of such cars.  It would seem therefore that the industry is exploiting a loophole in the legislation – and our research suggests that it is not by asking the dealers to hold onto the cars for at least three months as the legislation permits.  The Retail Motor Industry Federation is undertaking a review of the matter and is expected to report its findings shortly.”

David Raistrick, UK Manufacturing Leader at Deloitte, also takes a cautious view on the level of real demand in the UK car market and the outlook.

“Up until now, new car registrations in the UK have been broadly as expected, while a review of numbers for the rest of Europe indicate registrations are massively lower than last year and some countries definitely showing themselves to be in freefall,” he says.
“Perhaps the more interesting question is what this tells us about the UK market which, based on the numbers alone, would appear to be holding up particularly well. The question is one of whether the UK is defying gravity by comparison to Europe due a stronger economy, a pent-up demand for new cars or a mixture of exceptionally good deals on offer and other techniques being adopted to artificially keep registration levels where they were planned.
“Looking forward to the next 12 months, there is no doubt that if manufacturers do not see the return of new car sales across mainland Europe, they will need to look to other markets to take up the difference. This will obviously involve increased sales to other parts of the world, but could very easily also include a significant number of right hand drive build cars being pushed into the UK market. My prognosis for new car sales over the coming year would be fairly bleak, other than for the reality that manufacturers may find themselves necessarily needing to offer extremely attractive deals to buy new cars in the UK. Without heavy manufacturer support we will see new car sales fall.”

The SMMT data also shows that private retail sales were up 14.2% in September, an indication of some degree of ‘market push’. The SMMT acknowledged that market growth ‘is likely to be market specific, given wider economic concerns, boosted by attractive offers and enticing new models that offer significant fuel efficiency gains to UK motorists’.

The Ford Fiesta was the best selling new car in September and also for the year-to-date.

Towards the end of October, SMMT is due to revise its full year 2012 forecast for the UK car market, currently at 1.97m units.

UK Car Market – Top Ten selling car models, first nine months 2012 (units)

1. Ford Fiesta 88,747

2. Vauxhall Corsa 72,475

3. Ford Focus 64,521

4. Volkswagen Golf 50,142

5. Vauxhall Astra 47,125

6. Nissan Qashqai 35,865

7. BMW 3 Series 34,340

8. VW Polo 33,987

9. Mercedes C-Class 29,772

10. Fiat 500 26,480