The Society of Motor Manufacturers and Traders recently reported that car sales dropped by 0.8 per cent this past September, with only 332,476 new cars being registered in the UK – leading to fears that this may have a knock-on effect with the discount car insurance industry.
The SMMT’s concerns stem from how traditionally important the month has been for the car sales and motor car insurance industry, as around 17 per cent of yearly sales usually occur during September. The only larger sales month in a given year is typically March, as car insurance companies are usually flooded with new car policy applications due to new number plates coming out in both March and September.
The car industry’s disappointment is even greater in that August’s sales figures recorded a 7.3 per cent increase, marking the first car sector growth in more than 12 months. The SMMT said that sales projections for this year estimate around 1.92 million cars to be sold by 2012. The SMMT has already reduced this figure once, down from its original 1.93 million projection, and will be representative of a decline of 5 per cent in comparison with 2010 sales figures.
SMMT chief executive, Paul Everitt, remarked that the government needs to lend some aid to the car industry, stating that steps must be taken to implement measures to encourage more private investors in machinery, new plants, skills, and research & development. The lion’s share of consumers will most likely not be willing or able to purchase expensive items such as cars, said Mr Everitt, since purchasing power has been squeezed by tightening fiscal policy, low wage growth, and rising inflation.