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UK: Car market down 4.2% in November

By Dave Leggett | 6 December 2011

The UK new car market fell by 4.2% year-on-year in November according to figures released by the SMMT.

However, the SMMT said that November car sales of 134,027 units were still some 5,000 units above forecast. Some support to the car market is coming from relatively strong fleet sales, with weakness a feature of the retail sector.

New car registrations over the first 11 months of 2011 were down 4.5% on last year, at 1,822,065 units.

The SMMT said that the car market looks set to better the full-year forecast of 1.923m units, but added that caution remains over the 2012 outlook. The SMMT is currently forecasting a UK car market of 1.963m units for next year, with further growth in 2013 projected to take the market over back over 2m units.

“While the November new car market saw a 4.2% dip, the fuel efficiency of new models broke all records with the average new car achieving 52.5mpg,” said Paul Everitt, SMMT Chief Executive.

“Despite the Chancellor delaying the 3p rise in fuel duty, our cost of fuel is still among the highest in Europe, so customers are sure to welcome the 29.3% improvement in new car fuel efficiency over the last 10 years, a demonstration of industry’s commitment to delivering good value to motorists.”
 
The SMMT also said that market stability in recent months is at odds with growing concerns over the economy and described the latest forecasts for the UK economy and concerns over the eurozone debt crisis as 'unsettling'.
 
The UK market continues to be supported by growth in the fleet market and customer incentives, the SMMT said. Fleet sales in November were up 7.5% on last year at 74,638 units while retail sales were down 15.7% at 64,352 units.
 
Supported by relatively buoyant fleet sales, diesel cars achieved a record 55.6% share of the market in November, whilst alternatively-fuelled cars took a record 1.6% market share.
 
The Ford Fiesta remained the best selling model in both November and over the year-to-date.

David Raistrick, UK Manufacturing leader at Deloitte, said that the November car market result 'is slightly better than may have been expected'.

He also noted that Deloitte expects a more restricted number of nearly new used vehicles coming on to the market in 2012 as a result of low registration volumes over the past few years. “As a result of this restricted used car supply, a number of consumers will turn to new vehicles,” he said. “This will help to balance in part the drop in private consumer demand, with individuals deferring their purchase due to economic environment concerns.”

Raistrick also cautioned that the upsurge in fleet sales caused by operators deciding to renew fleets rather than further delay replacement could level off next year. “In the all important fleet market, there has been a steady increase in year on year sales over 2011, as fleet buyers who had previously delayed their replacement cycles came back to the market,” he said. “However, with this pent up demand largely satisfied, we will start to see new registration volumes in this sector of the market fall in 2012.”