June Sees Large Rise in New Car Sales

New car sales saw yet another increase in June compared with the same month last year.  A 10.8% rise now means that figures have been improving throughout the year so far leading to an overall improvement of 19.9% over the opening 6 months of 2010 compared with 2009.

195,226 new cars were registered in the UK last month according to The Society of Motor Manufacturers and Traders (SMMT), they also added that the figures had been ‘above expectations.’ The Vauxhall Astra was June’s bestselling car rising from 2nd in May to knock the Ford Focus off the perch.

Private car sales actually fell slightly by 3.3%, however this was expected due to June last year being the first full month in which the scrappage scheme was in use.  A sharp rise was seen in fleet sales to compensate for this, they shot up by 25% for the month.  Meanwhile, business sales also saw some good results, increasing 18.4%.

Paul Everitt, chief executive at SMMT has stated that the figures have come as a pleasant surprise to them.

“Like many, we were anticipating that this would be a difficult month because of the end of the scrappage scheme," he said.

According to Mr Everitt, the sharp rise in both the fleet and business sectors of the market have come as a result of what he described as ‘unique’ factors.

"There is some inventory building going on. During the depths of the recession most companies cut back quite a lot on inventory so we're seeing some impact there," he said.

"But also, this time last year there was such a big rush in scrappage scheme vehicles and private vehicles being sold that that crowded out some of the fleet market."

Everitt however is still refusing to be drawn out on the promising figures, and still expects a troublesome end to the year and remains cautions.

"I think the next six months are still going to be a very tough time for us. We would expect to see some dip following a buoyant first half of the year," he said.

Promising news for the rest of the year comes with the VAT increase to 20%.  It is widely expected that the VAT increase is going to boost sales on many long term purchases towards the end of the year as people try to save money before the increase is implemented on 4 January 2011.

Everitt added, “The increase in VAT that is scheduled for the beginning of January 2011 may actually give us a bit of stimulus towards the end of the year as people try to avoid that increase in cost."

Posted at 04:10PM Jul 06, 2010 by Marc Stenton in The Economy  |  Comments[0]