Derek McAllan, Head of Automotive Retail KPMG, comments on the new car registration figures for September published by the SMMT today:
“The UK new car market continues to significantly outperform the rest of the UK retail sector and the other European car markets with monthly sales in September this year up 12.1% compared to September 2012.
“The UK market powers onwards and upwards driven by improving economic conditions and rising house prices feeding consumer confidence and particularly strong private demand. This will likely continue into 2014 and maybe beyond.”
“Having fallen by over 20% during the recession, the UK new car market is in touching distance of pre-recession levels, similar to the US and in stark contrast to the rest of Europe. After an awful August on the continent there is now reason for some cautious optimism in September. The rollercoaster in Spain continues with sales up by 29% following an 18% fall last month. This increase is not a cause for celebration as it is influenced by both government subsidies and last September’s sales being the first month of a 3% tax hike.
“September sales in mainland Europe give rise to some cautious optimism. Sales in Germany were just 1% down which is a significant slowing in the rate of decline and sales in France nudged ahead by 3% albeit this was influenced by the French courts relaxing their ban on certain Mercedes models. Sales in Italy were down 3% and it is likely that these sales were boosted by buyers seeking to avoid a VAT increase ; so more bad news from Italy is likely next month .
“Overall the European car market remains hard to call. The arrest in decline in Germany is genuinely good news. In other markets a combination of local factors is making figures look good (or less bad in the case of Italy) but probably unsustainable.”
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