The decline in consumption and household morale weighed on purchases of new vehicles in August by around 25%. On the other hand, the sale of small models was on the rise. The sales reports for new cars have been published and they confirm the drop in confidence and household consumption of expensive products. The “Society of Motor Manufacturers” (SMMT), a group formed by car manufacturers, announces an annual drop of 18.6% in sales in August on sales to private buyers, rather than the dizzying fall of 23.6%.
The news comes as the Halifax property index followed by the Nationwide index record double-digit house price losses and the Bank of England freezes interest rates at 5%, refusing to lower them. to lower.
Sales of sports cars and sport utility vehicles (SUVs) are lower than average, while city cars are increasing their market share. Sales of Porsche, the favorite car of City traders, are down 26.6% over one year, a perfect reflection of the decline in bonuses and even employment in the City. On the other hand, the very small Smart has seen its popularity more than double (+104.6%) with nearly 5,000 new units for the year 2008 so far.
The ever-rising price of gasoline has inflicted some serious denting on sports cars and SUVs. Corvettes, Aston Martins, Bentleys and Jeeps saw their sales plummet. However Kia’s value for money range is in high demand, while Dodge and Cadillac are getting smaller and cheaper compared to the idea of American cars.
Above all, it is the worst sales (in the month of August) since 1966, although the figures are skewed as August was traditionally the best month for car sales until the system was changed in 2002. However, the trend remains downward, even if sales are brought back to the accounting date: down 3.8% compared to 2007 so far, and down 10.7% over the June-August period. The decline is accelerating all the more as the banks grant fewer and fewer car loans (however, certain companies continue to lend at very competitive rates).
Economists find a very intimate link between car sales and consumption. Allan Monks of JP Morgan says: “Our calculations predict a 4% annual decline in Q3 retail sales. The weakness in sales in August is completely in line with our forecasts”.
For two main English brands, now owned by the Indian Tata, the news is mixed. Boosted by its new XF Saloon model, Jaguar is up 12.7%, while Land Rover, which recently downsized, is down 15.6%. Mini sales are down very slightly.
All of this matters in the UK economy. Adding Opel (referred to as Vauxhall across the Channel), Toyota, Nissan, Honda, BMW, Lotus, MG-Nanjing, Ford and other automakers, the sector accounts for 195,000 jobs, or about one to two percent of GDP. Including dealers and garages, approximately 800,000 people derive their livelihood from the automotive business.
Britain’s bestseller in August was the Opel Corsa, with the Ford Focus leading the year in sales through August, as it has been for most of the past ten years. There is also an increase in diesel (44.3% market share), despite the rising prices of this fuel. Volkswagen’s Golf remains the country’s preferred choice of diesel engine.
The outlook is bleak, but if you’re wealthy, now might be a good day to treat yourself to a new convertible and soak up some rays of sunshine.
