Private sales boost car makers

By Michael Millar

Date: Thursday 05 Jul 2012

UK motorists continued to splash the cash in June as new car registrations rose for a fourth successive month, exceeding industry expectations.

The Society of Motor Manufacturers (SMMT) reported that new car registrations rose 3.5% year-on-year in June to stand at 189,514 units.

Total registrations over the first half of the year increased 2.7% to top one million units.

The numbers were driven by private buyers who bought 9.8% more cars in June than they did the previous year.

The first half of the year saw private demand rise 8.7%, contrasting with the same period of 2011 when private buyers were seen as the weakest link, with demand falling by 14%.

“Despite domestic and international economic concerns, UK motorists are responding positively to new products and the latest fuel-efficient technology," said the SMMT's Chief Executive Paul Everitt.

"The industry has performed better than expected in the first half of the year and we will now need to work hard to sustain growth.”

However, it was a different story in the corporate markets.

Fleet sales, which had been the strongest sector in 2011, fell 0.5% year-on-year in June, edging down 0.1% over the first half.

Meanwhile, business sales fell 2.5% year-on-year in June and were down by 17.5% year-on-year during the first half of 2012.

Dr Howard Archer, Chief UK Economist at IHS explaned that serious problems in the eurozone were heightening business uncertainty and encouraging firms to be cautious in their outlays.

"A worry for the car industry therefore is that many fleet operators and businesses will delay replacing vehicles to help contain their costs in such a troubling and uncertain economic environment," he said.

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