New car sales boost offers relief from Euro slump

6 March 2013
By Edward Gent
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New car sales last month were the highest since the end of the Government's car scrappage scheme inb 2010

New car sales last month were the highest since the end of the Government's car scrappage scheme inb 2010

New car sales accelerated ahead last month, boosted by an increase in private purchases, according to official figures.

Research by the Society of Motor Manufacturers and Traders (SMMT) revealed there were 66,749 new registrations in the UK in February – a 7.9 per cent increase on the February 2012 figure.

The figures took the year-so-far total to 210,392 – a 10.3 per cent increase on the figure for the first two months of 2012 – with the growth in private sales last month the highest since the end of the government's car scrappage scheme in spring 2010.

SMMT interim chief executive Mike Baunton said: "UK new car registrations have risen every month for the last year with February continuing the trend.

"However, February is traditionally a low-volume month as motorists look forward to the plate change in March, but attractive new car deals are sustaining the market.

"New models are delivering ever greater fuel efficiency, practicality, refinement, technology and predictable ownership costs, so motorists are seeing the benefit of new car purchases."

The best-selling models in February were:

1. Ford Focus

2. Ford Fiesta

3. Vauxhall Corsa

4. Volkswagen Golf

5. Vauxhall Astra

6. Nissan Qashqai

7. Volkswagen Polo

8. Peugeot 208

9. Mercedes-Benz C-Class

10. Nissan Juke

The news will come as welcome relief to car makers dealing with an unprecedented slump in car sales across Europe – with car registrations approaching a 20-year low.

And the Geneva car show  appears to be presenting another relative bright spot to beleaguered mass-market carmakers – the mini-SUV – with PSA Peugeot Citroen, Ford and Renault all revealing new subcompact crossovers on Tuesday, with Fiat and others close on their heels.

Despite austerity and unemployment city dwellers are queuing to pay a €3,000 premium for a slightly higher-riding runaround.

"It's not very rational," said Francois Bancon, the Nissan upstream development chief behind the best-selling Juke. "But we're not complaining."

The Japanese automaker, which unleashed the Juke's muscle-bound physique upon the world in 2010 and logged more than 97,000 European sales in each of the next two years, is soon to be upstaged by French parent Renault.

The curvaceous Captur, a Renault Clio hatchback with more body, and Peugeot's more obviously named 208 derivative, the 2008, will bump the Juke down to number 3 in the category next year, according to forecasting house IHS Automotive.

Overall, cash-strapped Europeans will snap up nearly 290,000 mini-SUVs this year, IHS Automotive's projections suggest – an 88 per cent advance on last year's total and triple the number sold in 2009, the year before the Juke's arrival.

All of this is welcome news for Peugeot, Renault, Ford, Fiat and General Motors' Opel brand as they struggle to halt regional losses and declining market shares.

"They can underpin these vehicles with the same architectures they have in the hatches and charge a damn sight more, just because customers want something a bit different," IHS senior analyst Ian Fletcher said.

The surge comes at the expense of other small-car versions, with traditional hatchback sales in 2013 expected to drop by a third from their 2009 level, but the price mark-up makes it a clear net win.

While the 2008's production costs are close to those of the 208 it is based on, Peugeot's crossover SUV starts at about €15,000, compared with €12,000 for the hatchback.

The Ford Ecosport and Fiat 500X are both due later in 2013, as the Italian car maker's chief executive, Sergio Marchionne, bets on variants of the retro-styled 500 model to make up for drooping sales of the ageing Punto hatchback.

Besides the Juke, the new models join Opel's Mokka, launched in Europe last year and designed from the same GM platform as the Chevrolet Trax, also about to go on sale.

London-based UBS analyst Philippe Houchois says that car-buying customers gain clear benefits for their extra outlay.

"People the world over seem to like a higher driving position," he said.

The front-wheel-drive powertrains that the new vehicles share with ordinary minis enable them to combine 4x4 roominess with small-engine fuel efficiency, he added.

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