UK Car Sales Slump
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Last months new car sales figures suffered yet another 24% drop, this means that the Government’s new £300m car scrappage is yet to have an affect on the market.
The Government’s scrappage scheme provides the consumer with £2000 towards a new model car when they scrap their old car if it’s older than 10 years old. The scheme launched in May, however, there were arguements from day one regarding costs, this lead to a number of manufacturers, one being Ford, holding off on their involvement in the initial stages.
Even with the introduction of the new car scrappage scheme, the UK has now suffered a streak of 12 months where the car market has suffered losses. This simply weakens the reports that consumer confidence is improving.
Details released from The Society of Motor Manufacturers and Traders revealed that 35,000 new cars had been ordered through the car scrappage scheme, however, they say that it will take time for this figure to change into new registrations. They also used the excuse that a huge number of consumers are looking around to try and get the best offer before buying a new car, this could just be a way of giving the scheme some extra time to prove that it wasn’t a complete waste of money.
Overall, 134,858 new cars were sold in May with the popular Ford Fiesta selling the most. Vauxhall have suffered this May after they were hit by a 40% drop in sales, they only contributed 15,386 to the overall sales.
A major reason for the slump in sales to due to corporate sales of new cars. Car leasing companies that offer a range of makes, such as Vauxhall leasing and BMW leasing, are reducing the amount of cars they are buying because they are also suffering from the economic crash.
Leasing companies are struggling because when many people consider getting a new car, they forget about leasing options which tend to be cheaper than buying a new car. Plus with the introduction of the car scrappage scheme, consumers are encouraged to buy a new car rather than consider other options.
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