New Car Sales In The UK Are Down By Almost A Quarter On May Last Year

UK sales of new cars were down by a quarter in May compared to the same time last year, despite the government’s introduction of a £300m scrappage scheme to encourage buyers back into the new car market. Sales have tumbled by 24.8%, marking the 13th consecutive monthly decline in sales.

A total of 289,958 vehicles were sold between January and May 2009, 289,958, a dramatic drop of 27.9% from the same period last year. The motoring industry has been hit hardest of all by the recession, and many car manufacturers have had to take drastic action to stay afloat. The constant decline in sales has caused many manufacturers such as Nissan, Vauxhall, Honda and Ford to implement temporary factory closures and many employees have found themselves out of work as jobs have been cut.

The new scrappage scheme introduced by the government should help begin to solve the problem, giving potential buyers a £2000 incentive to scrap old cars registered before 1999 and buy a new one instead. Granted, £2000 is not going to enable you to trade in an old banger and buy a new Mercedes Benz, but it’s a step in the right direction and more than 35,000 orders have been put in so far, though the result of this is yet to be seen in the sales figures. But this does not mean the scrappage scheme has been unsuccessful, It has only been going since the 18th May and will take time to convert into new car sales. The idea is that the project will help to restore consumer confidence and that June’s sales figures will tell a different story.

In spite of the car industry’s troubles there is one niche market that is still proving a huge success. The ‘mini’ segment grew by 50% in May, suggesting that consumers would rather buy a Nissan Micra, a Mini or a Ford Fiesta than a fuel-guzzling sports car or a people carrier. These small city cars are not only cheaper to buy but also more fuel efficient, for a lot of people a much more sensible option while times are hard.

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