Britain could be on track for another year of record car sales as consumers continue to cash in on low prices and cheap financing costs, it emerged yesterday.
Last month, when registration plates changed, sales rose 3.8% to 423,727, the best ever March. First-quarter sales showed a 7.1% increase to an all-time high of 722,718.
Car sales in 2001, boosted by a flood of pent-up private demand in the wake of the government's "rip-off Britain campaign" and deep cuts in manufacturers' list prices, reached a record 2.46m.
The Society of Motor Manufacturers and Traders, which released yesterday's figures, forecast earlier this year that 2002 sales could dip slightly to 2.35m, but is now expected to raise its estimates to 2.4m or 2.45m after the stronger-than-expected performance in the first quarter.
Annualised sales are already running at more than 2.5m but SMMT economists cautioned that it would be hard to replicate the record sales of September 2001 as a rise in interest rates and/or unemployment could hit consumer confidence.
Chris Macgowan, SMMT chief executive, has pressed the chancellor, Gordon Brown, to sustain the market by freezing motoring taxes and forgoing further reforms of vehicle excise duty.
He used yesterday's record figures to reiterate the case for the current franchised dealer system, now under siege from the EU competition commissioner, Mario Monti.
"Any drastic moves to change this system will only erode this level of confidence and could reduce the current high level of competition in the market place," he said.
The British bought a record number of imported cars in the first three months of 2002, with foreign penetration rising to 74.9%. SMMT economists expect this to peak at 76 or 77% later this year.
The ending of UK car production by Ford in February and Vauxhall's closure of its Luton car plant last month are seen as factors boosting imports - alongside continued weakness of the euro.
Ford, the market leader and now biggest car importer, saw its sales decline in March, reducing its market share to 14.47% last month and 15.9% in the first quarter compared with its traditional 17% or more.
Ford, which won a 16.4% share in 2001, expects to boost sales and to win back market share closer to 16%. The new Fiesta went on sale in the UK yesterday.
Vauxhall retained a 12.66% first-quarter share while the French remain keenly competitive through the weak euro, with Peugeot boasting a 8.6% share and Renault 7.33% in the first quarter.
The SMMT expects sales of UK-produced cars to rise, with Nissan, Honda, Mini and Jaguar (all foreign-owned) substantially boosting output through new models. Jaguar sales have more than doubled so far this year.
Meanwhile, BMW, whose 3-series was the sixth-best-selling car last month, has nearly 4% of the market - the same as Rover - as consumers opt for its diesel-powered versions.
Diesel registrations have risen by 51.6% in the first quarter and have captured 21.6% of the market, the highest for eight years, but still well short of the 35% levels seen on the continent where duty is substantially lower.
