Beat-the-VAT rush yet to take off as car sales fall for fifth month

NEW car sales have slumped for the fifth successive month, despite a looming VAT increase, according to latest figures.

Sales last month totalled 139,875 - an 11.5 per cent fall on the November 2009 figure, the Society of Motor Manufacturers and Traders (SMMT) said.

The downturn reflects the ending of the UK government's car scrappage scheme in May, which had boosted sales in the second half of last year.

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However, the fall last month was not as steep as had been anticipated and the SMMT is predicting total sales for this year will exceed two million.

The overall setback has been offset by a 6 per cent rise in fleet cars sales as companies sought to beat the January rise in VAT to 20 per cent, and the SMMT said the 26 per cent fall in private sales was less than expected for the same reason.

Stripping out previous car sales linked to the scrappage scheme, the association claimed in its November report that underlying sales were actually up 14 per cent.

Sales of cars generally in 2011 are expected to fall by about 5 per cent to 1.93 million.

SMMT chief executive Paul Everitt said: "Registrations are expected to fall next month, but demand may benefit from motorists looking to avoid the January VAT rise.

"This factor, coupled with the strength of the first half of 2010, means year-end volumes are expected to lift to over 2.03 million units - 2 per cent up from last year.

"Next year will continue to be challenging as consumer spending tightens and the government's austerity measures take effect."

Sales figures showed that the Ford Fiesta continued to top the car league table, with almost 100,000 sold this year.

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Meanwhile, sales of 4x4 vehicles continue to rise as the winter weather continues to bite. Land Rover models have dominated the top five of 4x4 sales, with Freelander, Range Rover Sport and Discovery taking the top, fourth and fifth positions respectively.

Douglas Robertson, chief executive of the Scottish Motor Trade Association, said of the November sales: "They are not as bad as we expected. Speaking to the dealerships, it appears that it is sales of new cars that have been going through, but not used ones. This is in part down to the scrappage scheme last year.

"I think the second half of next year will be good, but I still have concerns about the first half of 2011."