Cheap Car Loans and Fleet Sales are Helping the UK’s new Market

Dec 30 2011

Although car sales have taken a beating through much of Europe during the last couple of years, the prognosis for the UK car market in 2012 is considerably less dire, according to experts at Pricewaterhouse Coopers (PwC).

Times are likely to be tough, however, with new car sales set to fall below 1.9 million units in 2012, a decrease of 3% on figures for 2011.  However, according a senior analyst at PwC’s automotive forecasting service, Michael Gartside, the new car market will hold out considerably more robustly in the UK than in many other EU nations.  In Poland, for example – one of the stronger EU economies — new car sales plunged by 20% in November.

By contrast, in the UK new car sales in November stood at 2.14 million units, “the highest level this year and the fourth consecutive monthly increase” according to Gartside.

Other EU countries are suffering from rising car credit costs, which in turn is putting many hard-pressed prospective purchasers off car finance altogether, not least because they fear for their jobs.  By comparison, the UK still has relatively cheap car loans, which has protected the new market to some extent, Gartside believes.

Despite the fact that private new car sales fell by 14.1% between 2010 and 2011 in the UK, the sale of new fleets of cars to the corporate sector has risen by 4.6%.  Jason Wakeham, PwC’s automotive deals partner, said “If you look at recent vehicle volumes, in many respects, people would say that the market is still relatively strong, relative to the size of the UK economy and the population.”

Author - Louise Hutchinson

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