• New car
registrations were down 3.5 per cent to 179,272 units in May and by
0.6 per cent for the year-to-date. The mini segment was up 120 per
cent in May and up 27.4 per cent over the year-to-date. Diesel
demand continues with volumes up 8.4 per cent to 80,246 cars in
May. Paul Everitt, SMMT chief executive said: “The figures are in
line with SMMT forecasts for 2008, and we expect a tough year
“Current economic uncertainty, and increasing household costs mean
that many consumers may be taking a ‘wait and see’ attitude on all
major purchases, but growth in some new car segments shows that
there is still a lot of life in the new car market,” said Sue
Robinson, director of the RMI National Franchised Dealers
Association, commenting on the May sales figures.
The SMMT has trimmed its forecast for 2008 new car registrations to
2.335m, around 69,000 down on last year. The prediction for 2009
is, for the first time, a further decline at 2.325m, or 10,000
fewer than 2008. Over the first 4 months of 2008 registrations kept
in step with the corresponding period of 2007 (a nominal drop of
0.04 per cent).
• The Bank of England announced on June 5 that the interest
rate will remain at 5 per cent. “It’s good to see that the Bank of
England has taken a cautious view on interest rates, and held the
rate for June,” said Robinson. “This will allow the most recent cut
in interest rates to take effect. However there is some concern
that, with inflation on the rise and consumers reviewing their debt
status, household spending may need some further stimulation.”
Robinson added: “A further cut in interest rates would help
business and consumers alike.” However, the Bank of England has
signalled that interest rates are likely to remain on hold for the
time being, amid fairly gloomy consumer and producer price data.
Analysts have taken the May inflation report as a signal that
interest rates are less likely to be cut again in the near-term,
despite evidence that the economy is slowing.
• A study by Sainsbury’s finance has suggested that £22.8bn
will be spent on second hand cars between February and August,
compared to £24.9bn in the previous six months.
• Car advertisements could follow cigarettes and be next in
line to carry health warnings. At a meeting in Brussels, European
Commission legislators consulted vehicle manufacturers, advertisers
and environmental campaigners on the proposal that 20 per cent of
the space in every advertisement should be devoted to information
about CO2 emissions and fuel consumption.
• An FSA crackdown on payment protection insurance sales
practices across all retail sectors has seen a national retailer
fined £210,000. Its chief executive was also fined £14,000. Any
business selling insurance, including motor retailers, is required
to have an FSA licence and follow strict procedures. The FSA has
been taking firm action on the high-value PPI industry in its
Treating Customers Fairly initiative.