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UK market returns 10 months of growth - best year since 2007

7 January 2013

Commenting on the latest car registration figures from the Society of Motor Manufacturers and Traders, which show a 3.7% increase to 123,557 units compared with December 2011, David Raistrick, UK Manufacturing Leader at Deloitte said:

“The UK new car market has finished the year on a high with its tenth consecutive month of growth when compared with 2011 results. The growth levels achieved during December were somewhat lower than the preceding months and whilst enabling the 2012 sales figures to exceed most expectations, the fall in the level of growth achieved may be the indication of more challenging times ahead as the European market overall continues to be stalled by the financial problems affecting the Eurozone.

What will 2013 bring?
With mixed messages coming from economic statistics - unemployment numbers falling whilst output data hovers around the borders of low growth/contraction, it is unlikely that the UK will see any major growth in new car sales during 2013. Indeed, following the best year for new car sales since 2007, there is a strong likelihood that 2013 will see a reduction in the numbers of new cars sold. Artificial stimuli, such as pre-registrations or self-registrations, are not possible on a sustained basis so we expect them to decrease during 2013.

Fast forward to December this year, what are the developments we might expect to have seen during 2013? Manufacturers and retailers may be looking at the decreasing numbers of new drivers taking the current driving test as many find themselves priced out of car ownership and running costs. With insurance premiums for young drivers on a continual upward spiral, our research indicates that the idea of car ownership is becoming less attractive and the requirement for more flexible “ownership” options more relevant.

With regard to car ownership, as longer term retention becomes the norm, the widening availability of five-year low interest finance deals will enable car buyers to manage the cost of ownership over the longer period. Longer vehicle retention is already having an effect on used values as both ex-fleet vehicles and used vehicles generally have seen an increase in values due to the shortage of prime stock. Our analysis indicates that this will lead to greater overall levels of franchised dealer servicing and improve dealer/customer relationship retention.

With the Block Exemption Regulation changes coming up mid-way through the year, we may also see significantly greater numbers of car retailer operations changing hands than in a typical year.”


About Deloitte:
In this press release references to Deloitte are references to Deloitte LLP, one of the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

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