Drop in sales fails to put skids under motor trade sentiment

INDUSTRY leaders are still forecasting a steady rise in annual car sales north of the Border despite business going into reverse last month.

Figures yesterday revealed a 0.25 per cent year-on-year dip in sales of new cars in Scotland, compared with a rise of almost 8 per cent for the UK as a whole.

Douglas Robertson, head of the Scottish Motor Trade Association, described the fall as a “little bit disappointing”. It follows several months of year-on-year growth as the sector gathered pace following a weak 2011.

“We do believe such a small decrease is further proof that there is now a stability in the market and we would anticipate further small increases over the remainder of the year,” Robertson added.

“We remain on course for our forecast increase of between 5 and 7.5 per cent over the whole year as the increase in private demand continues, albeit slowly.”

There were 13,082 new cars registered in Scotland during May, down from 13,115 a year earlier. The UK total came in at 162,288 units, up from 150,431 in May 2011 – a rise of 7.9 per cent.

The three best sellers in Scotland and UK-wide were the same models – the Vauxhall Corsa, Ford Fiesta and Ford Focus.

Last month’s UK increase was the largest for 23 months, boosted by 14.3 per cent growth in private sales. The May rise took the total for the year so far to 868,166 motors – up 2.6 per cent on January-May last year.

Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT), which compiles the data, said: “May’s increase is good news for the motor industry and the UK economy, particularly the steady growth in demand from private buyers. There is no doubt that vehicle manufacturers and their dealer networks are working hard to deliver value for money to motorists, and the consistent climb in new car registrations during the first five months of the year suggests that confidence is returning, despite financial uncertainty in the eurozone.”

Sales rose for the third-successive month to produce the highest monthly increase since June 2010 when registrations were boosted by the UK government’s scrappage scheme.

Howard Archer, chief UK economist at forecasting outfit IHS Global Insight, said: “The latest data are encouragingly decent. This lifts hopes that consumers may be becoming a little more prepared to spend, , which would be good news for recovery hopes.”