Registrations stall in stormy September

September new car registrations typically account for at least 17% of the annual total, running a close second to the March volume. This September was more than 120,000 units lower than the March figure, falling to its lowest level since the twice-yearly plate change system started in 1999, according to the Society of Motor Manufacturers and Traders (SMMT).

With September’s reliance on private sector interest, it was no surprise that the lack of consumer confidence was reflected in lower private registrations despite accounting for 45% of the month’s total.

Outlook for the last quarter subdued

The market has fallen in each of the past five months and in all bar two months in 2008. Since April, the 12 month rolling total has dropped by almost 150,000 units, with September accounting for 60% of this fall.

Recent news on the banking sector, further slowdown in the housing market and rising unemployment has knocked confidence. It may be some time before it is restored, unless swift action is taken.

It may not be before quarter three next year that the market stabilises. The rescue package for the American economy, lower oil prices and a positive message in the pre-budget report could help lift the economic gloom.

Decline across all sales types evident

The private sector was down 23.3% in September, slightly below the 23.6% drop recorded in August, but it remains significant nonetheless. Private demand has fallen in every month of 2008.

Fleet volumes started the year brightly, but they too have fallen and recorded double digit declines in each of the past two months. Business volumes have fallen by more than a third in the past three months.

Vauxhall Corsa is best seller again

Vauxhall Corsa took the best seller’s slot for a second successive month – a feat not managed by any model other than the Focus this millennium. The Focus remains the UK’s best seller over the first nine months of 2008.

Only the mini segment posted growth in September, thanks to smart, Hyundai’s i10 and Vauxhall’s Agila. Large cars, in general, saw sharper sales falls then small cars - although both Audi and Jaguar bucked the trend and saw volumes rise in September.

Diesel and AFVs see market share rise

Diesel volumes fell, but their market share rose from 39.4% a year ago to 42.8%, as consumers continue to opt for more efficient vehicles. VW’s Golf was the best selling diesel model, as it has been for all bar two months this year.

Alternatively Fuelled Vehicles saw their market share rise from 0.7% to 0.8% of the market, although their volumes also fell in the month to 2,738 units, but were still up 1.5% over the year to date to 13,586 units.

Economic analysis

The rise in oil prices impacted on global economies and helped drive inflation up. More recently oil prices have fallen. As lower prices filter through it is hoped inflation will ease and base rates can be more credibly lowered. This in turn should make borrowing cheaper and lift confidence and spending.

Increased confidence is clearly needed in the new car market. A further drop of 20% in the final quarter this year would leave full year volumes at 2.165mn units, the lowest since 1996.

Paul Everitt, SMMT chief executive, said: “New car registrations have fallen for the fifth consecutive month and represent the most difficult economic conditions the industry has faced in 17 years.

“Government action is now needed to restore consumer confidence and boost demand in the real economy. The chancellor's pre-budget report should set out a package of measures to boost demand for new fuel-efficient cars and scrap plans for unfair increases in car tax.”