Some economists have been disappointed in their expectations that new car sales would show a bit of a surge as buyers hurried to get ahead of the increase in VAT. The latest numbers from the SMMT (Society of Motor Manufacturers and Traders) revealed that new car registrations in December 2010 were 18% below last year’s figure, coming right after a drop of 11.5% in November.
For the year overall, new car registrations rose by about 1.8% over last year, bringing the number up to 2.03 million, but that figure is the second-lowest in the past ten years. Around 5%, or 100,000 of the registrations resulted from the scrappage initiative, but when that ended in midyear, sales dropped off again by almost 14% in the second half of 2010.
The fact that December was the coldest on record for the U.K. definitely had an impact on auto sales, as the weather kept a lot of people off the roads and out of the showrooms, but even with seasonal changes, the SMMT is gloomily forecasting another drop in sales over the coming year.
They estimate a 5% decrease in 2011, due in part to the 20% VAT and in part to spending cuts by the government. Paul Everitt, SMMT’s Chief Executive, said that though conditions would be “challenging”, the auto industry in general seems to expect an improvement by the second half of the year.
The most popular car in the U.K. for 2010 was the Ford Fiesta, with the Land Rover also doing well, and Renault coming in strong with a 51% increase in sales. Interestingly, Rolls Royce reported that sales were up by 171% over 2009, and both Bentley and Porsche reported sales up by around 30%.
