New car sales fall – buyers 'nervous'

09 January 2006

UK new car sales fall by 8.7%
Registrations in December hit record levels
Diesel sales increase by 37.4%

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New car sales in Britain fell by 8.7% last year, according to statistics from the Society of Motor Manufacturers and Traders (SMMT). It is the first time since 2001 that new car sales have fallen below 2.5 million.

However, sales recovered well at the end of last year, thanks to a record number of registrations in December. This increase was mainly due to company car drivers taking advantage of the 3% tax waiver before the end of the year.

Sue Robinson, of the Retail Motor Industry Federation, believes the reason for the fall is nervousness on the part of car buyers: 'The fall is mainly from private buyers. This mirrors the high street experience over the past few months – interest rate rises in 2004, increasing taxation, and a general feeling of insecurity are all playing a major part,' she said.

However, the December results show that not everything is bleak. 'Despite a tough 12 months, a record December has seen us through to a respectable year-end total,' said Christopher Macgowan, chief executive of the SMMT.

Diesel sales helped boost the impressive December results, with a 40.6% rise in that month. Company car registrations with Euro IV-compliant engines accounted for a large part of the rise.

Key car stats from 2005

The Ford Focus remains the UK's best seller for the seventh year running, and was the top seller in every month of 2005.

The Vauxhall Astra was second, rising from sixth place in 2004.

Diesel sales rose 38.6% over the year – the Ford Focus was the most popular diesel sold.

The loss of MG Rover accounted for 37.4% of the total market downfall for 2005. It also represented 98.8% in the drop in volume of UK-built cars in the year.