Raistrick said: ‘With reports of manufacturing production levels at a two year high and the sixteenth consecutive month of new car sales growth, July has got off to a good start. In continental Europe, car manufacturers are looking for indicators that the painful market contraction is lessening and with Germany, Italy and France all reporting lower rates of decline when compared with last month, there is the suggestion that the bottom may have been reached.

‘The challenge going forward is that the budget end of the market remains the growth area for the European mainland with pressure remaining on manufacturers’ profit margins.

‘At the halfway point of 2013, the UK new car market is nearly 100,000 new car sales ahead of the levels reached this time last year.  Industry data points to the growth in sales being largely driven by the private buyer who continues to be supported by the availability of competitive finance deals on new vehicles.  Indeed, the need to compete by providing the low finance rates highlights the increasing importance within Europe of the UK market as the level of sales in Germany, France, Italy and Spain continues to contract. With base rates remaining at historically low levels, there is no immediate end in sight for the availability of relatively cheap financing options for the UK car buyer.

‘It will be interesting to see how the introduction of government incentives in European markets affects the level of new car sales over the second half of 2013.  With Spain having implemented a rebate scheme for private buyers who trade in old cars for new and the French government looking to allow private-sector workers to tap into corporate employee-savings plans to help fund significant purchases such as cars, there are definite steps being taken to help the automotive industry to turn the corner in these markets.’