UK car sales fall by a further 25%
UK sales of new cars were down by a quarter in May compared to the same time last year, despite the government’s introduction of a £300m scrappage scheme to encourage buyers back into the new car market. Sales figures have plummeted by 24.8%, meaning that sales have dropped for 13 consecutive months.
A total of 289,958 vehicles were sold between January and May 2009, 289,958, a worrying drop of 27.9% compared to the same time in 2008. The recession has affected the motoring industry more than any other, and car manufacturers have had to resort to drastic measures to keep their heads above water. The constant decline in sales has caused many manufacturers such as Nissan, Vauxhall, Honda and Ford to implement temporary factory closures and many employees have found themselves out of work as jobs have been cut.
The government have implemented a new scrappage scheme to address the problem, which provides consumers with a £2000 incentive to scrap old cars registered before 1999 and buy a new one instead. Granted, £2000 is not going to enable you to trade in an old banger and buy a new Mercedes Benz, but it’s a step in the right direction and more than 35,000 orders have been put in so far, though the result of this is yet to be seen in the sales figures. This does not mean the scrappage scheme has failed however, as it only launched on the 18th May and will take time to convert into new car sales. The idea is that the project will help to restore consumer confidence and lead to rise in sales from June.
Despite the obvious setbacks for the motoring industry there is one niche market that is still proving a huge success. The ‘mini’ segment grew by 50% in May, suggesting that consumers would rather buy a Nissan Micra, a Mini or a Ford Fiesta than a fuel-guzzling sports car or a people carrier. These small city cars are not only cheaper to buy but also more fuel efficient, for a lot of people a much more sensible option while times are hard.
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