Deloitte comments on October 2012 new car registration figures
6 November 2012
Commenting on the latest car registration figures from the Society of Motor Manufacturers and Traders, which show a 12.1% increase to 151,252 units compared with October 2011, David Raistrick, UK Manufacturing Leader at Deloitte said:
“The UK continues to lead the way in European new car sales, with the main continent’s decline triggering unease in global automotive manufacturers.
On the one hand, a number of major UK dealer groups have reported strong sales growth in 2012, but their counterparts in Europe are witnessing a decline. This is particularly uncharacteristic in Germany, where a double digit contraction in September 2012 for new cars and a 2% reduction overall for the year will instigate some very serious dialogue in the boardroom.
Commentators continue to point toward the Chinese market as a key growth area for manufacturers but have neglected the fact that the majority of cars sold there are manufactured in China itself. Of the 14.5 million new cars sold in China in 2011, 832,000 (less than 6%) were imported. Most of the major manufacturers have at least one production facility in China, mostly operating as joint ventures with Chinese automotive manufacturers.
With the decline in the European market, there has already been abundant rumours and confirmed plant closures in the past few weeks, with manufacturers actively seeking to restructure their European production facilities to quell overcapacity in the market.
Whilst UK new registrations are likely to end the year at just over 1.9 million, in line with original forecasts and on the surface appear strong, it is important to also look at the huge decline across every other European market. The UK figures include substantial numbers of both pre-registrations and manufacturer early registrations, which are not sustainable in the longer term. Stripping these out would show a very different picture in the UK. Whilst the vehicle registrations for the next couple of months are fairly cast in stone, there is now a real risk that the UK could head in a similar direction to every other major European market during 2013.
From a retail perspective, the residual values of used vehicles will continue to hold firm in the short to medium term, due to a continuing scarcity of supply created by several years of limited new car sales. Manufacturer support for vehicle sales continues to make new cars desirable, with a typical new UK car being both more highly specified and having a more fuel efficient engine than the equivalent average vehicle sold across mainland Europe.”
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