Deloitte: Is growth in UK new car market the ‘lull before the storm’?
February data from the SMMT shows a 7.9% increase in the overall new car market to 67,749 units compared to February 2012. Fleet registrations were down 4.4% to 35,759 units while 1,708 vehicles were registered for the sub-25 fleet sector, down 1.4%. In contrast, private registrations rose 28.9% to 29,282 units.
David Raistrick, UK manufacturing leader at Deloitte, said: ‘The UK new car market continues to defy gravity with growth levels in stark contrast to the contraction in the major European markets. The growth achieved in the UK during 2013 has exceeded even the most optimistic expectations, while European sales fell 12.8% in January.’
He added: ‘The overall numbers give a depressing picture for Europe and show a clear split between the winners and losers in the new car market. Prestige and low-cost car manufacturers are seeing some growth in a shrinking market while the high-volume manufacturers are feeling the greatest pain. This would suggest that the new car buyer is either willing to justify the extra expense to buy into the aspirational brands, or is confident that the value for money offered by perceived budget brands is backed up by an improving quality product.’
Raistrick said that both private and fleet registrations showed how buyers are reacting to increasing fuel charges, both diesel and petrol.
‘This is encouraging car drivers to change from older, less fuel-efficient vehicles to high-efficiency options, whether smaller, turbo-assisted petro vehicles, the latest diesels or hybrids,’ he commented. ‘Ultimately, the price point for each of these technologies will determine the level of take-up given the continuing pressure on household and business budgets alike.’
Commenting on the forecast for the coming months, he added: ‘While the UK numbers remain strong, which is clearly in everyone’s interest, one must ask the question as to what is really different and driving strong performance in the UK by comparison to Europe, and in particular the stronger European economies such as Germany. As German new car sales continue to free fall, we need a deeper understanding of the drivers behind the UK’s growth. Is the lull before the storm, or a sustainable longer term high performance?’