UK car sales rise 11% in August

UK car sales rise 11% in August

UK car sales rose by 11 percent in August, the 18th consecutive month of growth, in contrast to Germany, France, Italy and Spain, which all suffered sales declines.

Some 65,937 new cars were registered last month, down sharply from 162,000 in July, as motorists waited for September’s biannual change in number plates, which in Britain identify the year of registration.

“This is great news for an industry that has been carefully balancing supply with demand, and with the new plate change, growing consumer confidence and attractive packages, I think we’ll be in for a good autumn,” said Richard Lowe, head of retail & wholesale banking at Barclays.

Last month, the Society of Motor Manufacturers and Traders revised upward its forecast for total UK car sales this year to 2.21 million, 8 percent more than in 2012.

”The motor retail market looks set to remain strong for the remainder of the year and into 2014,” Derek McAllan, UK head of automotive retail at KPMG, said today, but added that the UK could still be hit by the downturn in the rest of Europe. “The main worry for the UK is if the continued slump in Europe will tempt manufacturers to pump additional units into the UK. Too many additional units will bring margin erosion but worse residual-value volatility. So all eyes should be on mainland Europe for the next two months sales figures.”

New-car sales have risen robustly in the UK in contrast to key markets in continental Europe. The country’s sales also picked up long before a broader resumption in consumer spending that has helped drive an unexpectedly strong economic recovery this year.

Ford’s Fiesta subcompact was the top-selling model in the UK in August, followed by General Motors’ compact Vauxhall Astra and Volkswagen’s Golf.

In Germany, Europe’s biggest auto market, registrations were down 6 percent to 214,044 units last month, while French sales were down 11 percent to 85,565 vehicles. In Italy, volume fell by 7 percent to 52,997. Spain’s sales declined by 18 percent to 38,872.

August is a holiday month for many, making it hard to extrapolate sales trends, but there had been hopes that the slump in Europe’s car sales was flattening out after some positive news in July.