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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Re: Worsening car sales predicted
Horseand, I usually agree with your analysis but public sector fleets just don't mean that much in the UK new car market and I'm a bit puzzled why the SMMT keep singling them out. They account for around 100,000 vehicles out of somewhere between 1.5-3.0 million, depending on how you define a fleet car and/or van. The backbone of the UK fleet market is middle management company cars on three year/60,000 mile lease deals, and these roll around like a metronome. Extending leases, even for a couple of months, is usually prohibitively expensive and not many companies are doing it, even now. The changes in the UK fleet market are being limited to parc loss due to redundancies and changes in tax treatment of capital allowances which make anything with over 160g/km stand up pretty well. Fleet sales were down 16% in Dec and that feels about right to me.
Re: Worsening car sales predicted
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?