New car sales slump 13.5% as Scotland is left behind

WEAK demand from private customers left Scottish new car registrations stuck in reverse last month as "subdued consumer confidence" took its toll.

The country recorded a 13.5 per cent year-on-year drop in registrations, compared with a 3.5 per cent fall for the UK as a whole. Scotland had out- performed the rest of the country in the previous two months.

Douglas Robertson, chief executive of the Scottish Motor Trade Association, said the difference between the Scottish and UK figures was down to the make up of the markets north and south of the Border.

He said: "Private demand was especially weak throughout the UK and - as private sales are greater than business and fleet sales in Scotland - we are bound to suffer more when consumers are feeling the pinch.

"We are very disappointed to see a drop in sales of this size after the stabilisation of the past few months. However, we remain confident that the latter part of the year will see an increase in confidence and demand."

Robertson expects more motorists to replace their cars during the second half of the year following two harsh winters, which have taken their toll on ageing models.

Sales of supercars in Scotland continued at low levels, with only one Ferrari, two Maseratis and two Bentleys sold in July, according to the data.

Overall, new car registrations in Scotland fell to 9,701 last month from 11,069 in July 2010, while the UK figure decreased to 131,634 from 136,446, marking the 13th consecutive month of declining sales.

The pace of decline was less than the falls recorded earlier in the year as the effect of the UK government's scrappage incentive scheme - which ended in March 2010 - ebbed away.

Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said July's falls reflected "the impact of slower economic growth and subdued consumer confidence".

He added: "Robust demand in the fleet sector helped to bolster weaker private demand.

"While the coming months remain challenging, performance in the second half of 2011 is expected to keep the market on course to reach around 1.93 million units."

That figure would be down 5 per cent on 2010's total.

Everitt said the sluggish nature of the economic recovery, high inflation and modest wage growth were acting as dampeners to consumer confidence.

UK private registrations fell by 9.2 per cent last month, but fleet sales were up 2.1 per cent.

Diesel registrations were just 53 units shy of last July's level and, over the year-to-date, have grown by more than 35,000 units to account for 50.2 per cent of the overall market and 52.4 per cent of the July market, up from 44 per cent and 50.6 per cent respectively a year ago.