Car sales continue to slow

News Article - 15 December 2010
Category:

Consumer demand for new cars in the UK continued to weaken throughout November despite sales figures beating forecasts.

New car registrations fell by 11.5 per cent in November to just under 140,000 units, according to the Society of Motor Manufacturers and Traders (SMMT). Experts had previously predicted registrations for November to settle around the 130,000 mark. This is the fifth consecutive indication of decline in the automotive industry.

These figures are unlikely to pick up before the year is out, with expectations of a further fall again in December. However the final sales figures for 2010 are expected to be around two per cent, and two million units, higher than last year. Sales of fleet vehicles are up 10.7 per cent over 2010 to date.

Car manufacturers are likely to experience an even tougher 2011, according to SMMT Chief Executive Paul Everitt. A combination of reduced consumer spending and the Government's austerity measures will lower demand across the sector. Sales are expected to fall by around 5 per cent in 2011 to 1.93 million units.

David Raistrick, automotive partner at Deloitte, considers it unlikely that demand will pick up at any point in the near future.

"Today's figures are a stark reminder of the challenges that lie ahead for the motor industry into 2011," said Mr Raistrick. "As consumer and business confidence remains unsettled, it is doubtful that either private or business sales will grow in the New Year. I stand by my prediction that new vehicle sales for 2011 will be closer to the 1.8 million unit mark."

Whilst the manufacturing industry continues to lead the UK's economic recovery efforts, this news is a reminder that instability and uncertainty continue to dominate the sector. With the full force of the Government's austerity measures unlikely to be felt until January, in addition to the planned VAT hike, manufacturing companies may experience a difficult and unstable 2011. All firms should ensure internal operations are as efficient as possible in order to survive tough conditions and make the most of new opportunities.

Access manufacturing and production software can help firms achieve internal efficiencies. Full labour traceability (to products, orders, customers and operations) enables you to identify sources of inefficiency and establish the true cost of each activity. By tracing and fixing inefficiencies, companies can enjoy a more satisfactory bottom line.

For more information, please call Access on 0845 345 3300.

Article keywords: new car registrations, Society of Motor Manufacturers and Traders, SMMT, automotive industry, fleet vehicle sales, SMMT Chief Executive Paul Everitt, consumer spending, Government austerity measures, David Raistrick, Deloitte, manufacturing industry, economic recovery, VAT rate rise, manufacturing companies, Access manufacturing and production software, labour traceability

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