UK car sales are showing signs of slowing from the breakneck growth of the past 20 months, as growth in October was just 4 %, the first single-digit result for eight months.
The industry association – SMMT – is forecasting growth in 2014 and 2015 will slow to about 1 %. Despite October’s slower growth, sales so far in 2013 are still more than 10 % above 2012 levels and the SMMT has raised its annual sales forecast to 2.25m cars, up from 2.22m.
“Looking ahead, we anticipate more moderate growth as the market stabilises,” said Mike Hawes, chief executive of SMMT, which collates the sales data.
Unemployment and a slow economic recovery have ravaged sales in mainland Europe. They are on course to fall for a sixth consecutive year in 2013. The UK, the second-largest European market after Germany, has bucked the trend – carmakers have sensed the optimism about economic recovery and have tempted customers with financing offers and discounts.
The share of new cars being purchased with credit in the UK hit a record high of 75 % in the 12 months to August, up from 50 % before the recession. This helped drive sales to a five-and-a-half year high in September. But falling disposable income in the UK could reduce consumer confidence, analysts cautioned, and take the heat out of demand.
Via Financial Times