UK: Dealer group says strong 'nearly new' volume offsets new car sales drop in first half

By just-auto.com editorial team | 6 July 2005

New car sales in the UK were down slightly in the first half of 2005, but the overall market remained "incredibly strong" thanks to burgeoning 'nearly-new' second hand car sales, the Retail Motor Industry Federation (RMI) said on Wednesday.

1,296,485 new cars were sold during first half of 2005, a 5.8% drop on 2004's first half, according to data compiled by the Society of Motor Manufacturers and Traders (SMMT).

227,623 new cars were sold in June, down 4.8% on June 2004.

Sue Robinson, director of the RMI's National Franchised Dealers Association, believes that new car sales only show part of the picture.

"When you combine the new car figures together with the strong second hand car market, it is clear that the consumer is still car-hungry."

According to Robinson, fluctuations in the new-car market are driven by consumer choice based on the options available.

"Over the last five years, following intense lobbying of government, we saw a lowering of new car prices, with significant growth in the private market. The result was movement by many consumers from the high end of the second hand market into new cars.

"However, this intensely value-conscious group of buyers is now taking advantage of the wide availability of low mileage nearly-new cars, which offer new-car prestige at used car prices. They are currently tending to shop around for these cars."

Robinson added: "The consumer is manipulating the opportunity, and sales in this market are therefore very brisk."