Car Mini

UK car sales drop by almost a quarter

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%, the 13th month in a row that sales have fallen.

The total number of vehicles sold from January – May 2009 was 289,958, a dramatic drop of 27.9% from the same period in 2008. No other industry has been hit harder by the recession than the car industry has, and many manufacturers have been forced to resort to desperate measures to stay in business. The sharp fall in sales has forced many car makers including Nissan, Vauxhall, Honda and Ford to temporarily suspend production in their UK factories and a large number of workers have been left without jobs.

The new scrappage scheme introduced by the government should help begin to solve the problem, providing consumers with a £2000 incentive to trade in their old cars registered before August 1999 as scrap and purchase 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. This does not mean the scrappage scheme has failed however, as it only launched on the 18th May and will take time to convert into new car sales. It’s hoped that the scheme will improve people’s faith in the car industry that June’s sales figures will tell a different story.

Despite the obvious setbacks for the motoring industry 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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