September new car registrations show surprise growth

Despite concerns over consumer confidence due to the banking sector's difficulties, demand for new cars rose in September, according to the Society of Motor Manufacturers and Traders Limited (SMMT).

A modest decline to 405,000 units had been expected in this key 'plate change' month, but volumes were actually the best since 2004 – when the market went on to record a full year total of 2.567mn units.

Demand was up across all sales types and the overall September volume was 1.1 per cent or 4,591 units above the 1999-2006 average of 414,699 for the month.

2007 total likely to exceed 2.355mn forecast

Registrations in the third quarter rose by two per cent – better than the predicted modest decline of 0.7 per cent. The market over the year-to-date was up two per cent or 38,627 units.

With the 12 month rolling total already at 2.383mn units, the final year-end figure now looks likely to surpass the 2.355mn unit forecast set in July. The forecast will be reviewed later this month.

The economy remains robust, unemployment levels are low and there is a hint that interest rates may have settled or even fall.

All sales types post growth in September

Every sales type category posted growth in September. Private demand was up 1.5 per cent, as market share modestly grew from 46.4 per cent to 46.5 per cent. Private volumes over the year-to-date have improved by 7,983 units. Most commentators had thought that any signs of weakness in the market would first appear in the private sector.

Fleet/business demand rose by 1.1 per cent in the month and was up 2.9 per cent, or 30,644 units, over the year-to-date figure.

Fiesta tops September best sellers list

For the second year in a row the Ford Fiesta was the top seller in September. The Ford Focus was number one over the first nine months of the year, outselling the second placed Astra by 13,001 units or 14.3 per cent. However, the Focus did slip to third in September – its first time outside the top two since April 2000.

MINI entered the top 10 for the month, registering a record 8,764 units in September.

Diesel market climbs again

Diesel-powered cars saw their market share rise by two full percentage points in September, to a new high for the month. Diesel registrations rose for a seventh successive month in September and were up by 46,937 units over the first three quarters of the year.

The Ford Focus is the best selling diesel model year-to-date, but has been kept off the top slot in each of the past four months. The Ford Mondeo took top honours in September.

Economic analysis

The economic setting remains fairly upbeat, and the panel of independent forecasters on the HM Treasury website (hm-treasury.gov.uk) now expects GDP growth to rise to 2.9 per cent this year.

This positive setting is backed up by the Nationwide's regular consumer confidence index (nationwide.co.uk). This suggests consumer confidence has improved, in part buoyed by low unemployment levels. The spending index is not as positive, but has recovered slightly.

The impact of the banking sector worries and future concerns regarding rising costs, may temper confidence levels. GDP growth projections for 2008 are subdued – at 2.2 per cent.

Christopher Macgowan, SMMT chief executive, said: 'September has traditionally been the strongest month for registrations after March – and this year it has exceeded expectations with 419,290 new cars motoring out of showrooms.

'With climate change issues at the forefront of everyone's agenda, it is encouraging to note the rise in uptake of low-carbon vehicles. Motorists are increasingly playing their part in tackling environmental impact and SMMT's annual Sustainability Report, to be launched on 9 October, will highlight the progress the UK automotive manufacturing sector has made over the last eight years.'