New car sales exceed 2 million

New car sales last year rose by more than 4 per cent, breaking through the 2 million barrier for the first time since 1990 after a stronger- than-expected increase during December, the Society of Motor Manufacturers and Traders will reveal today, writes Chris Godsmark.

The figures, a closely monitored barometer for the economy as a whole, will show total sales for 1996 of some 2,030,000, compared with the 1,945,366 cars registered in 1995. Sales in December could have risen by almost 12 per cent, to more than 80,000, following a disappointing drop of 5.4 per cent in November. However imports are likely to have accounted for more than 60 per cent of all cars sold in 1996 compared with 54 per cent the previous year.

The figures will worry the established top three manufacturers, Ford, Vauxhall and Rover, which continued to lose market share, with imported Volkswagens and Fiats doing particularly well. Preliminary data suggests Ford's sales last year were down by more than 2 per cent to around 430,000, with a similar drop for Vauxhall and a worrying fall of some 8 per cent for Rover.

However, last-minute registrations appear to have just prevented Ford's share of the overall market from sinking below the psychologically important 20 per cent barrier for the first time in recent years. Ford is expected to have accounted for about 20.3 per cent of registrations during 1996, down from almost 22 per cent in 1995. Vauxhall's market share also slipped by one percentage point to around 14.5 per cent, while Rover's fell from 12 to just over 10.5 per cent.

The increase in the total car market was also less than many experts had predicted at the beginning of the year, with the all-important August figures disappointing observers. Lex, one of the largest dealer groups, blamed the modest scale of the increase on reluctance of private buyers to make spending commitments.

"They just didn't appear in the numbers we'd liked last year. Private buyers haven't been tempted out of the woodwork despite plenty of discounts, low interest rates and the improvement in consumer confidence."

The most impressive performance came from Volkswagen, which saw sales excluding its Audi, Seat or Skoda subsidiaries surge 42 per cent to 116,000, raising the its share of the market from 4.2 to 5.6 per cent.