Pleas to government follow July’s 13% fall

July’s slump in new car registrations was bigger than expected and has persuaded the SMMT to reduce its forecasts.

Last month’s total of 153,420 was 12.97% down on July 2007; the year-to-date total of 1,400,899 was 2.96% lower. The SMMT expects second-half sales to be 6.6% adrift of 2007.

Demand from retail buyers in July tumbled 16.8% year-on-year – the steepest decline since February 2005.

Year-to-date registrations have dipped by 6.2% in the private sector and by 8.8% in business registrations. Fleet registrations from January to July totalled 717,178, a rise of 0.7%.

New forecasts from the SMMT are 2.31 million for this year (a decline of 3.9% against 2007), and 2.23 million for 2009 (a further decline of 3.5%).

The only positive trend is a 19.4% rise in demand in July for hybrids and other ‘alternatively-fuelled’ cars, though the total was just 1,479 units.

Paul Everitt, SMMT chief executive, is asking the government to find ways to encourage people to buy lower-CO2 cars and help cut the cost of motoring.

The SMMT is pressing for a complete review of planned VED changes, fearing they would depress residual values. A Commons’ report said the changes would hit the poorest hardest and deliver negligible environmental benefits.

An SMMT spokesman said: “We want to see a system that is more stable and creates certainty for consumers and the motor industry.”

Sue Robinson, NFDA director, has also called for the government to “clarify the future cost of motoring”.

Ford’s 8.5% rise in July volumes enabled it to outsell Vauxhall – June’s top seller.

Retaining market leadership this year is not “an objective”, according to Ford, which says the increase was through genuine sales.

Factors included the revised Focus and Kuga, which added around 1,200 registrations in a sector new to Ford.

Dealers are bracing themselves for a testing period through to next spring.

Ken Savage, chairman of Perrys Group, said: “Sales were not too bad up to May despite the economic worries.

But it is getting increasingly tough for new cars, with the additional concern of the impact on residual values.”

For many carmakers 2008 is ranging from disappointing to disastrous. Nineteen are going against the downward trend (only two in the top 10) – BMW, Kia, Nissan, Smart, Jaguar and Volvo have seen the best gains.

Just 10 carmakers increased sales year-on-year in July while only three have amassed six-figure registration totals so far: Ford (210,625), Vauxhall (196,039) and Volkswagen (114,011).

VW’s fall of almost 25% in July was a surprise but it lost 4,000 registrations that were among the 30,000 units whose paintwork was damaged by a freak hailstorm at its export point in Germany.

The refurbished UK cars will be registered this month.

France’s trio – Peugeot, Citroën and Renault – had declines of between 20-30% last month as they were punished by the weakness of sterling against the euro.

Honda did equally badly and is more than 9% down year-to-date.