New car sales ‘to fall in 2011’

SMMT said the outlook for 2011 remains “challenging” and it expects sales to fall

Sales of new cars in the UK grew by 1.8% in 2010 from the previous year, according to industry figures.

Registrations rose by 35,847 units to 2,030,846 according to the Society of Motor Manufacturers and Traders (SMMT).

But the SMMT warned sales were set to fall by 5% this year as “difficult market conditions continue”.

Demand for fleet vehicles rose by more than 10%, but private sales slipped following the end of the government’s Scrappage Incentive Scheme in May 2010.

This was reflected in sales which were up by 19.9% in the first half of the year, but which fell 13.8% in the second six months.

December sales were down by 18% on a year earlier – again because of the impact of scrappage scheme sales in 2009.

And while overall sales grew in 2010, it was the second lowest volume of car sales in the past decade and almost 375,000 below 2007 levels, the figures showed.

The SMMT’s chief executive Paul Everitt said 2010 had been a “year of recovery for the motor industry”.

“Economic conditions remain extremely challenging, but industry expects demand to strengthen in the second half of the year,” he added.

“Competition in the retail sector will intensify as the industry seeks to rebalance demand across its new and used car and service and repair business.”

Mr Everitt added that UK motor manufacturing had recovered “particularly well” in 2010, saying the outlook was for “further steady growth” this year.

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