From the TUC

New car sales down in December

07 Jan 2011, by in Economics

Today’s figures are for new car registrations in December from the Society of Motor Manufacturers and Traders. Last year sales were very influenced by the scrappage scheme, which finished in March; sales were up strongly in the first half of the year, down in the second half.

Registrations were 18 per cent lower in December 2010 than twelve months earlier,  but if the effects of the scrappage scheme are removed there is a 4.8 per cent increase.

Compared with 2009, sales were 1.8 per cent higher in 2010 than in 2009. Even so, 2010 still saw the second lowest level of sales in the decade – 375,000 down on 2007.

There is an important difference between fleet and private sales. Private registrations were below one million for only the second time in the decade, and private sales in 2010 were 5.6 per cent lower than in 2009 (and the December figure was 37.5 per cent down.) Fleet registrations were “more resilient” and grew by 10.3 per cent over the year (42.8 per cent in December).

This difference is reflected in the prospects for the coming year:

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.

This looks like the the picture for the wider economy, where forecasters expect depressed household consumption and relatively healthy business investment. The same provisos apply – if weaker international demand, raised interest rates or problems in the Euro Area feed through to lower UK growth, then we can expect car fleet sales to be hit too.

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