October new car registrations reflect fuel efficiency concerns

Following the better than expected September figures, new car registrations rose in October, according to data from the SMMT.

October volumes were up 0.9 per cent or 1,354 units over the 2005 total to mark only the second monthly gain this year.

However, it should be noted the 2005 October registrations figure was weak, itself down 10.8 per cent. The 2006 market was still 14,374 units or 8.5 per cent below the 1999-2005 average for the month of 168,225 units.

Private registrations level, fleet demand up

The private sector was again almost unchanged compared to 2005 volumes. It remains to be seen if the October 2006 market performance really is the start of a strong and consistent revival in private demand – especially with a rise in interest rates expected imminently.

Recovery in the fleet sector continues to underpin the solid market performance over the past few months. Registrations rose to account for 52.9 per cent of the October market, up from 51.1 per cent last year.

Forecast revised up, but net decline still due

SMMT revised upwards the full year 2006 forecast to 2.345mn units, 15,000 units above our previous estimate, after the stronger than expected September performance.

Volumes could decrease by some 26,000 units or eight per cent in the next two months and the forecast would be met. Most of the expected reduction is likely to occur in December – which was very strong last year.

A 2.345mn total figure for registrations would be some four per cent or 95,000 units below the 2005 market. It is anticipated that future years will remain at or just below this level.

Focus back on top, Astra returns to second place

The Ford Focus returned to its accustomed best seller's position in October, having been knocked off the top spot by the Ford Fiesta in September.

The Vauxhall Astra also surpassed the Fiesta in October, placing it in overall second position over the year-to-date.

It was, however, a strong month for superminis like the Fiesta. Their volumes recovered to post a net 8.4 per cent rise in the month and 1.8 per cent over the year-to-date.

Diesel penetration best level since December

Demand for diesel-engined cars rose for a sixth successive month in October. The 5.4 per cent increase pushed volumes up to account for a 41.7 per cent share of the market, the highest rate since the exceptional December 2005 market.

Whilst the 12-month moving annual total hit a record 916,720 units, diesel demand is expected to fall in November and December, after the market distortion caused by changing emission standards last year.

Stern's CO2 focus – good news from auto sector

The Stern Review added an economist's weight to encouraging action on climate change. The automotive industry has good news on CO2 emissions and is one of the most open and transparent sectors about its performance. Regular reports on emissions from the tailpipe and manufacturing process are available (see www.smmt.co.uk).

The fluctuation in fuel prices and the increase in cost of motoring has also contributed to the further rise in demand for lower CO2 emitting cars – like small cars and diesels (see chart).

Total CO2 emissions from cars are falling and the average energy taken to build each vehicle in the UK has been cut by almost half since 2001.

'Environmental issues are high on everyone's agenda, be it car makers or car buyers. SMMT's recently published Sustainability Report clearly shows that the motor industry is taking its environmental responsibilities seriously,' said SMMT chief executive Christopher Macgowan. 'October showed the highest diesel penetration this year, taking 41.7 per cent of new car registrations this month. Fuel efficiency and increased environmental awareness are now high on customers' priorities when considering these significant purchases.'