New car registrations fell 24.8% in May

The new car market fell a further 24.8% in May, although this was slightly down on the 27.9% decline recorded over the first five months of 2009, according to the Society of Motor Manufacturers and Traders (SMMT).

The scrappage incentive scheme came into effect on 18 May and since the announcement in the Budget over 35,000 orders were reported to BERR. However, it will take some time for those orders to translate into registrations. As details of the scheme were finalised some consumers may also have been holding off purchasing a car, awaiting the best deal.

Over the first five months of the year the market is down almost 290,000 units, and on a rolling annual basis down 555,663 units to 1.842 million units. The market recorded its 13th straight decline in volumes in May.

The fall is evident across all sales types, although in May private demand was down a relatively modest 13.8%. In part this reflects the fall in private demand last year, but is also likely to be an early sign of revival under the scrappage scheme.

Diesel penetration fell for a second successive month, from 44.8% in May 2008 to 44.0% this May. This reflects the shift towards smaller cars, which tend to be petrol engined. The mini segment was the only segment to record volume growth, up 50.3%. The supermini segment saw market share rise, from 32.2% to 34.6%, and Ford’s Fiesta was again the overall market’s best seller in both the month and year-to-date.

Paul Everitt, SMMT chief executive, said: “While consumer confidence is improving, the UK motor industry is still facing a difficult economic climate.

“We have seen an encouraging start to the scrappage incentive scheme with 35,000 orders being placed since it was announced, although it will take time to feed into registration figures.”