UK car sales rise in March

New car sales figures, released today, show month on month sales were up 5.9 per cent compared to March 2012. Fleet registrations increased by 3.7 per cent last month whilst private registrations increased by 7.8 per cent. The car industry received the news very positively, but market analysts were more cautious. In any case increased registrations are good news for the tyre business albeit in the medium to long term.

“It is positive that new car sales were up in March as retail demand continues to grow.” said Sue Robinson, Director of the RMI National Franchised Dealers Association (NFDA) which represents franchised car and commercial vehicle retailers across the UK, commenting on the SMMT’s new car registration figures.

Robinson continued “Dealers reported strong interest in news cars by consumers who were encouraged into the showroom by strong manufacturer deals and competitive finance offers. Although consumer confidence remains sluggish there are signs that it is starting to grow. The NFDA are hopeful that this is a trend that will continue through 2013.”

Analysts counsel caution

However, in a specialist sales commentary, analysts Morgan Stanley counsel caution. The analyst concedes that the UK is currently propping up the Western European car market, but describes the UK March data as ‘volatile’ due to the effect of the change in registration plate number during that month. The report concludes:  “We stick with our near term cautious view in autos, given we now face a sector with a general lack of earnings momentum, the increasing risk of a North European demand slow down and higher uncertainty than before.”