SMMT figures will show massive falls in new car sales
5 November 2008

New car sales in the UK are likely to have plummeted to their lowest level for 17 years during October.

Official SMMT figures, due to be released tomorrow, are expected to show an overall fall between 23 and 25 percent, the steepest decline since 1991.

In September, new car sales fell dramatically by 21 per cent year-on-year. October is expected to reveal a worsening decline. Luxury car brands and SUVs will have likely been worst hit with consumers unable to get credit and running costs a bigger concern than ever.

Tremors from the credit crunch are being felt around Europe. Sales of new cars in Germany - Europe’s biggest economy - fell 8 percent in October, while in Spain they were down 40 percent.

Yesterday it was revealed that Jaguar Land Rover would cut up to 400 more jobs at its UK factories. The Indian-owned firm’s managing director David Smith today called on the government to cut interest rates by 1 percent.

“We need a real shock to the system,” said Smith.

In recent weeks there have been lay-offs at Bentley’s Crewe facility, which had been operating a three-day week for months. Nissan’s massive Sunderland factory has non-production weeks scheduled, and Ford’s Transit plant in Southampton has cancelled shifts.

British car-makers including Jaguar Land Rover are calling on the government to emulate the US and offer substantial loans and investment in developing greener cars to help shore up the industry.

A similar package of ‘soft loans’ is being considered by the European Union, spurred on by the French government and Peugeot-Citroen.

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Comments
12

5 November 2008

It's not just car manufacturers feeling the heat. Car dealerships are going under all over the place. Sidlow group, which had six dealerships in Sussex and Surrey, last week went into receivership taking 200 jobs with them and leaving Sussex with no Volkswagen dealership coverage. Theres talk that a Toyota dealership in West Sussex only sold one car last month with a similar story at an Audi dealership. This is going to be bloody.

5 November 2008

Too right. This article is backed up by a unique phone call I had 5 minutes ago from Nottingham OPC. They were keeping me informed of upcoming changes to the Boxster/Cayman range expected next Feb. (Mild makeover, 2.9 litres for the standard models and direct injection for the S pair).

The point is that over the last 8 years and 3 new cars I've always had to make the running with them to buy a car, and now they actually seem to have realised that they may need to start selling them in the future. How refreshing, I can see a lot of internal training courses bein required around the OPC's.

PaulJ

5 November 2008

[quote Autocar]Official SMMT figures, due to be released tomorrow, are expected to show an overall fall between 23 and 25 percent, the steepest decline since 1991[/quote]

Obviously you've had some privileged early info. here, from the SMMT presumably. Otherwise you wouldn't stick your neck out with such a precise figure range. By the way, why does it take that shower, SMMT, four working days to publish monthly sale stats when all other countries manage it within one or two working days of month's end? Are British cars sales figures unique, more complicated to add up?

I don't buy it anyway. I wouldn't put it past SMMT and its members to fiddle the figure. My gut instinct is that the UK car market is at least as bad as America's, which fell by 32% in October. Ireland and Spain two countries collapsing economically due to fraudulent housing speculation bubbles, like UK, suffered 55% and 40% falls in sales respectively in October. I believe the UK car market has collapsed and is down by half on this time last year. It's running now at an annualised rate of around 1.4 million units, or down over 1.3 million units from peak in 2006. By contrast Germany which had no property pyramid scheme suffered only an 8% fall and is still up 3% year-to-date.

6 November 2008

[quote horseandcart]I believe the UK car market has collapsed and is down by half on this time last year. It's running now at an annualised rate of around 1.4 million units, or down over 1.3 million units from peak in 2006.[/quote]

horseandcart-

you believe?.....on what basis?- are you out counting 58 plates? I find your posts interesting and provocative- but you need taking to task sometimes!!!

the car market is predicted to finish this year at over 2million units- this is still going to be a top ten year ever...where are the 600000 units missing from your figures?...is the SMMT part of the great conspiracy theories i can feel running through your posts?

6 November 2008

[quote keeforelli]are you out counting 58 plates?[/quote]

Well I have only seen 6 "58" plates since September. Of course, I may need to pay more notice but I find actually driving whilst in a car takes up a large proportion of my attention.

Where has all Japanese design went to?

6 November 2008

[quote Zeddy]I find actually driving whilst in a car takes up a large proportion of my attention.
[/quote]

And being a twit, don't forget.

6 November 2008

[quote keeforelli]you believe?.....on what basis?- are you out counting 58 plates[/quote]

- no, what would I do for the other 23 hours and 59 minutes in the day - they're as rare as hens teeth. Only kidding.

I have no empirical evidence as such. First let me explain the 1.4 million figure. I was talking about the running rate currently annualised off the back of the latest October figure, not the actual figures year-to-date, with two months, Nov. and Dec. to come forecasted, to give the 2008 total.

I was wrong about 2007 being a peak year for sales in recent times. According to SMMT figures 2003 was the peak year with almost 2.6m cars sold. In 2007, sales were 2.4m. Now take a full year at 23% down on the 2007 figure and you get around 1.85m. That's almost 750,000 units off the peak year of 2003 already. Looking closer at the Oct. registration figures from SMMT you'll see that within the UK as a whole Northern Ireland recorded a 30% fall in sales compared to Oct. 2007 and Scotland 26%. Now, if we took the worst-case N.Ireland figure for UK representative the projected full year figure compared to 2007 would be 1.7m units. You see N.Ireland is suffering the mother of all housing bubble bursts like its cousin south of the border, the Republic, where car sales were down 55% in October. My point is that England and London and the South East generally have been more immune to decimation of disposable spending money compared to other parts of the UK until recently due to the higher employment levels and higher wages generally, the general feelgood factor of rising house prices/wealth, although offset somewhat by higher mortgage repayments of course in the first place. But now that the mindset has flopped over and even over-£1m properties in central London are losing up to 20% of their value on an annual basis, something which has only taken hold properly in the last three months or so, one would expect and anticipate a rapid fall-off in purchase of big-ticket items like cars, often funded in the past with equity withdrawal through re-mortgaging, in the same way that areas like the West Midlands and Yorkshire have been experiencing for some eighteen months now. Therefore I maintain that the 23% national figure of sales decline has further to go down once the bite of fast falling house prices and inability to equity withdraw to fund big purchases, and the whole shrinking wealth feeling takes full effect. The template for this is largely visible to see in the United States, where although they have had much lower borrowing rates for some six months now October sales were down 32%.

Now lastly, if we again examine the SMMT registration figures we will see that it's really fleet sales that are holding total sales up. Private purchases were down by nearly 30% last month whilst 'business' purchases were down by over 40%. I imagine fleet purchases are still holding up because large scale job axing has not yet taken place across the economy. However there are signs of that now happening, not least of course in car manufacturing. However again, the real buoyancy aid to car sales and fleet sales in particular is public sector purchasing. Note the SMMT in their press release stressed again that the public sector - local councils, central govt, departments, the NHS, the cops, etc.- must keep to their pre-planned procurement schedules, if not add to them. Now, in other, to put it plainly, bust countries, like Ireland, Spain and Hungary, the governments have introduced severe austerity programmes to reduce budget deficits and total government borrowings. This inevitably means slashing of any new spend on things like new vehicles - the old must do and soldier on. In Germany for instance, not known for being bust, some local police forces have been rationed in the fuel allocations for their patrol cars to such an extent that push bikes are being used instead, for economies. Britain, perversely, due to the lack of accountability of its ruling party and autocratic leader has gone the other way and set out its intent to 'spend its way out of a downturrn'. This in the short-term is good for public sector vehicle procurement but to put it bluntly suicidal in the not too distant medium term. In other words this printing and borrowing of fiat money will only hasten the economic collapse of UK economy and ultimately mean an even greater cutting back in all procurement budgets, public sector and private sector companies once the ability of UK to borrow stops, i.e treasury gilts are not bought and yields go sky-high, driving all UK interest rates up with them - similar to what was seen in Iceland recently.

So, to summarise, even with the 30% decline compared to 2007's 2.4 million units annualised the UK car market is back to 1.7m units, which is a 900,000 unit decline compared to the peak year of 2003. Factor in the likely UK govt borrowing crisis forcing a slashing of govt spending within 12 months maximum from now and one can envisage a decline of 40% or more quite easily, through devastation of public sector fleet procurement. A 40% decline would mean nearly 1.2m fewer units sold than in 2003.

6 November 2008

[quote Bruce Wayne]And being a twit, don't forget.[/quote]

Thanks for your vote of confidence.

Robin not talking to you?

Where has all Japanese design went to?

13 November 2008

you're sceptical about the 40-50% down figure. looking around West Sussex and Central London (not the poorest areas in the UK by any means) I have seen very very few 58 plates around and that figure would not surprise me at all. I do know of at least two dealers in West Sussex selling one car a month so that also makes it look pretty believable to me

13 November 2008

Yes the credit crunch and the anyday now recession thats coming IS having an effect on the car markets, but don't you think there too much choice?. I mean if you go to any of the top manufacturers they have at least seven or more models and within that more editions , now choosing a car is a serious job and with so many models and specs to choose from its no wonder we the buyers can't make our minds up!.No part of the problem is what i referred to in the first sentance, but manufacturers should take some of the blame too, after all i can't believe that there are so many "niches" that we need new types of cars.I would be interested in other peoples views about to many types of cars and whether they are neede or not?

Peter Cavellini.

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