Sales drop in July

With volumes down 4.1 per cent to 168,000 year-on-year in July and trailing 4.2 per cent behind last year over the first seven months of the year with registrations of just over 1.4 million, the SMMT slammed an interest rate rise of 0.25 per cent this month for putting more pressure on the struggling market. SMMT chief executive Christopher Macgowan said: “Consumer confidence has clearly taken a knock in the past 18 months and the announcement from the Bank of England will not help a weakened new car market. “Two factors have kept buyers away from showrooms this year. The first is the effect of interest rate rises, the second is soaring fuel costs.” Macgowan claimed rising prices at the pumps were leading buyers to opt for diesel models over their petrol equivalents. Sales of oil burners jumped 5.9 per cent year-on-year in July to 65,500 to hit a 39 per cent market share for the first time this year. For the year-to-date sales were up 2.4 per cent to 528,263 – a 37.5 per cent market penetration. The SMMT said alternative fuelled vehicles were also selling more strongly in 2006 with petrol-electric hybrids up 55 per cent to 5,315 in the year to the end of July. Bolstered by sales of the revised Vauxhall Zafira, the segment leader, the MPV market leapt 17 per cent in July. The Zafira was the ninth best selling car overall in the first seven months of the year with more than 29,000 models leaving showrooms. Private sales continued to flounder in July – down almost 10 per cent to 68,300 to take a market share of just 40.7 per cent. Fleet sales edged up 1.3 per cent last month to 89,600 – 53 per cent of the total market. Business sales tumbled 9 per cent to little over 10,000 units. For the year-to-date the private, fleet and business sectors were down 5.2 per cent, 2.3 per cent and 10.9 per cent respectively. The SMMT has revised down its year-end forecast by 20,000 units to 2.33 million new sales, which would represent a 4.5 per cent drop on 2005. Fiat's renaissance continued apace in July with sales rocketing 68 per cent to 4,827. The brand's sales were up 67 per cent for the year-to-date. On the other hand Kia lost further ground after a three year period of rapid growth with sales down 26 per cent in July to 1,878. The brand was 3.6 per cent behind for the year-to-date.