Car sales tumble by almost a quarter since last May
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UK sales of new cars were down by a quarter in May compared to the same time last year, despite the government’s introduction of a £300m scrappage scheme to encourage buyers back into the new car market. Sales have tumbled by 24.8%, the 13th month in a row that sales have fallen.
A total of 289,958 vehicles were sold between January and May 2009, 289,958, a worrying drop of 27.9% compared to the same time in 2008. The motoring industry has been hit hardest of all by the recession, and many car manufacturers have had to take drastic action to stay afloat. The constant decline in sales has caused many manufacturers such as Nissan, Vauxhall, Honda and Ford to implement temporary factory closures and a large number of workers have been left without jobs.
The government have implemented a new scrappage scheme to address the problem, which gives potential buyers a £2000 incentive to trade in their old cars registered before August 1999 as scrap and purchase a new one instead. Granted, £2000 is not going to enable you to trade in an old banger and buy a new Mercedes Benz, but it’s a step in the right direction and more than 35,000 orders have been put in so far, though the result of this is yet to be seen in the sales figures. But this does not mean the scrappage scheme has been unsuccessful, as it only launched on the 18th May and will take time to convert into new car sales. It’s hoped that the scheme will restore consumer confidence and lead to rise in sales from June.
In spite of the car industry’s troubles there is one area of the market that is still flourishing. The ‘mini’ segment grew by 50% in May, suggesting that consumers would rather buy a Nissan Micra, a Mini or a Ford Fiesta than a fuel-guzzling sports car or a people carrier. Smaller cars are much more fuel efficient not to mention cheaper to buy, making them a far better choice for those who don’t have much cash to spare.
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