The UK’s Society of Motor Manufacturers and Traders (SMMT), an industry body that represents car manufacturers and importers has said 2011 was the worst year for new car registrations in a decade with vehicles sales dropping 4.4% to 1.94 million units.
Lower demand is blamed on the economic situation facing the UK, a market where high demand for replacement vehicles usually continues unabated. 2011 was only the second time since 2000 when new vehicle registrations fell below two million, the previous occasion being 2009, a depression year. In addition, a car scrap scheme introduced by the government in 2010 resulted in higher than expected registrations, negatively impacting new registrations in 2011.
Regular new car purchasing is a national obsession in the UK as buyers upgrade every few years to ensure the number plate of their car always dates the vehicle as a late model car. Every 6 months the number identifier changes (3rd and 4th characters) on a UK number plate change, allowing observers to accurately age a vehicle.
Since July, sales of new cars have been declining, and first quarter figures for 2013 are not expected to improve much, with a weak economy and slow growth predicted. Fleet buyers, who made up 60% of registrations in 2011 are expected to dominate again in 2012.
Analysts had been predicting a 4.5% fall, and markets reacted favorably to the 4.4% announcement, though UK motor manufacturers out-performed expectations with increased production, possibly due to rising national sentiment related to Eurozone difficulties and the election of David Cameron and his Conservative party led coalition.
During 2011 UK car manufacturers made 1.35 million vehicles, an increase of nearly 400,000 units from 2009 figures. Nearly all of the 11 major manufacturers with factories in the UK have committed to boost production, with SMMT quoting new investment in production lines totaling four billion pounds in 2011/12.
With new models and ongoing investment in the automotive industry the UK is projecting strong manufacturing output for the next five to ten years, indicating that smaller vehicles remain a popular and growing segment in Europe and for UK export markets.
Smaller cars such as the Ford Fiesta, Ford Focus, Vauxhall Corsa, Volkswagen Golf, and Vauxhall Astra dominated sales figures, with diesel vehicles and low emissions vehicles a trending niche in a country with narrow streets and high levels of population density.
High performance cars and luxury cars have also seen good news in the investment stakes, with McLaren having started production of their MP4-12C in February, Aston Martin announcing it’s Cygnet supercar will be manufactured in the UK, Jaguar Land Rover awarding two billion pounds of contracts to suppliers for the new Range Rover Evoque, and Rolls Royce commencing upgrades to their Assembly Hall and Surface Finish Centre, to be completed in 2012.
Amongst mid range vehicles BMW is committing 500 million pounds to new facilities for UK production of the 2012 MINI Coupe and Roadster, and Nissan announced that the new Qashqai will be produced at the company’s Sunderland plant.
