CAR dealers have shrugged off the gloomy economic conditions to record the highest rise in sales for two years, driven by a surprisingly strong increase in Scotland as private buyers flocked to the showrooms.
The jump in July registrations means that Scottish sales in the year to date are growing at more than twice the rate for the UK as a whole.
Experts pointed to greater competition, improved supply and strong demand among private buyers north of the Border. However, analysts warned of a bumpy road ahead and noted that sales were still some way off their historic peak.
According to the Society of Motor Manufacturers and Traders (SMMT), there were 143,884 new cars registered in July, a 9.3 per cent increase over the same month last year and the strongest gain since July 2010.
In Scotland, dealers experienced a 24 per cent jump in registrations to 12,036 last month, with Ford and Vauxhall both recording double-digit increases.
At the top end of the market, 38 Bentleys have been sold in Scotland so far this year, along with 24 Ferraris and one Lamborghini.
Douglas Robertson, chief executive of the Scottish Motor Trade Association, said he was “a little surprised” at the size of last month’s increase, which pushed registrations in Scotland up by 7.2 per cent in the year to July, compared with UK growth of 3.5 per cent.
Robertson said the figures suggested that manufacturers have caught up with their order books, having previously experienced problems in their supply chains as a result of last year’s earthquake in Japan. He also said private buyers account for a larger proportion of Scotland’s car market than the UK as a whole, which has seen a drop in fleet sales.
Yesterday’s upbeat figures contrast sharply with those for the rest of Europe, where sales are at their lowest level in almost 20 years. Ford last month predicted it will lose more than $1 billion (£641.8 million) in Europe this year, while rival Peugeot – which expects its European market to contract by 8 per cent this year – is cutting 8,000 jobs and closing a plant near Paris.
July’s rise in UK sales was the fifth monthly increase in a row and the SMMT has raised its full-year sales forecast to 1.97 million cars. While that would represent a 1.6 per cent rise on last year’s total, SMMT chief executive Paul Everitt said the trade body’s new forecast pointed towards a slight slowdown in growth during the second half of the year.
He added: “International economic stability remains a concern for vehicle manufacturers and the UK market, but intense competition and new fuel- efficient products are creating great opportunities for motorists.”
Chris Williamson, chief economist at Markit, said: “Car sales have now risen above last year’s numbers in each of the past five months in a welcome sign that consumer sentiment is showing some resilience in the face of the many stresses that personal finances are facing at the moment.”
However, he added that car sales are still below the peak seen in the year to March 2004, when an average of 219,000 new cars were registered a month.
Howard Archer, chief UK economist at IHS Global Insight, warned that the motor industry was still facing “very challenging conditions” despite last month’s encouraging sales figures.