British car sales climb 1.8 per cent in 2010: trade data

January 08, 2011 | 09:00

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New car sales in Britain rose 1.8 per cent last year, despite a sharp drop in December, as the motor industry staged a modest recovery, trade data showed on Friday.

The total number of new car registrations climbed to 2,030,846 vehicles in 2010, the Society of Motor Manufacturers and Traders (SMMT) said in a statement.

"2010 was a year of recovery for the motor industry with new car registrations up 1.8 per cent on 2009," said SMMT Chief Executive Paul Everitt.

"Economic conditions remain extremely challenging, but industry expects demand to strengthen in the second half of the year.

"Competition in the retail sector will intensify as the industry seeks to re-balance demand across its new and used car and service and repair business."

However, the industry experienced mixed fortunes last year after the end of the government's new-for-old car scrappage scheme in March.

Sales soared by nearly 20 per cent in the first half of 2010, but tumbled 13.8 per cent in the second half.

In a further blow, the SMMT also revealed that 123,817 new cars were registered last month.

That marked an 18-per cent slump from December 2009 and was the sixth successive monthly drop -- despite the looming VAT sales tax hike which kicked in earlier this week.

The SMMT industry body also predicted that sales would drop by 5.0 per cent this year to 1.93 million vehicles, citing difficult trading conditions.

"The car sector faces a difficult looking 2011," said IHS Global Insight economist Howard Archer.

"Not only will car sales be pressurized by the VAT increase from 17.5 per cent to 20.0 per cent, and current record high petrol prices, but private sales are likely to be dampened appreciably by the serious headwinds facing consumers."

The most popular car model in December was the Vauxhall Astra, but the Ford Fiesta retained the top spot for the whole of 2010.

AFP

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