New car sales will not see year-on-year growth until at least 2011, according to industry analysts IHS Global Insight.
Sales have fallen from a peak in the middle of the decade of around 2.5 million units, to around 1.975m in 2009. Next year, IHS predicts UK new car sales will be 1.788m units before returning to around 2m units in 2011.
Colin Couchman, an analyst at IHS, told Autocar that the introduction of the 17.5 per cent VAT rate in January and the withdrawal of the country’s scrappage incentive scheme will hurt sales next year.
“The UK’s scrappage scheme hasn’t been as generous as others on the continent,” said Couchman. “So sales haven’t been as high as they could have been, but there’s still been lots of people buying cars this year to take advantage of the scheme and beat the VAT rise.”
Couchman said that of the 227,000 cars sold so far under scrappage, around 75,000 have been to people who would have bought cars next year instead if it hadn’t been for scrappage. “These people are now out of the market and the lack of their presence will hurt sales,” said Couchman.
Unless an incentive scheme is introduced to benefit the fleet sector, Couchman says it will continue to suffer until the economy picks up.
“Usually fleet sales stay at similar levels in a recession, but this time they’ve significantly dipped,” he said. “We’re not likely to see them rise again until the economy significantly recovers enough to boost consumer confidence.”
Couchman believes new car sales will return to “more normal” levels in 2013 and 2014, with sales expected to reach around 2.2m units. “We’re unlikely to see the highs of this decade for some while as people are going to be more cautious with their money from now on, holding onto their vehicles for longer,” he said.
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Re: UK car sales 'to drop next year'
- irrespective of anyone's thoughts of the scheme or its format they will have known re. the sales and the VAT
-the idea was to stimulate output on a global scale; it helps stimulate economies. i guess the risk was that by the time the car sales pick up the wider economy has recovered enough and thus as the car sales potentially reduce other sales pick up
- i guess the extension and the run up to christmas and VAT going up was no conicidence! - when would you change your car? 15% with scappage of 17.5% without?
-irrespective of what you think it has stimulated the UK economy and the gobal economy (we are the global village) its done that well - you really (genuinely) cannot argue any different; so it did its job! (without doubt! and not jsut here in the UK)
-also you will find (no doubt) that discounts will be offered next year by manufacturers and all the scappage scheme work helps not just this year but also next year.
Re: UK car sales 'to drop next year'
May be not but you can guarantee that the government minister that came up with the scheme didn't think of it!!
Re: UK car sales 'to drop next year'
With scrapage finishing and VAT going back to 17.5%, it diesn't take a genius to work that one out!