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Saturday, August 1, 1998 Published at 20:05 GMT 21:05 UK

Business: Your Money

Last August car bonanza

Dealers are expecting an 'S registration' sales bonanza

Car showrooms have enjoyed their busiest day of the year so far as customers rushed to pick up the new S-registered vehicles.

The motor industry is hoping for record sales this month in what is expected to be the last traditional August rush for new cars. From 1999 registration plates will change twice a year.

A quarter of all cars sold in Britain every year leave the showrooms in August as people flock to buy the new registration

If manufacturers do not do very well in August, it means they probably will not do well for the whole year.

It has been predicted that demand for the latest models will reach a new peak of 530,000 this year.

Last August saw a record 525,000 new cars being driven away from the showrooms.

There could be an added bonus this year as the new S registration number plates may be worth something among collectors as they start changing twice a year from now on.

This is designed to help the motor industry iron out the high summer increase in demand. The S plate will be eclipsed by the T plate in just seven months.

Change afoot

The annual August deadline has been a headache for the industry for years. It restricted staff summer holidays and led to forecourts being crammed with new models.

[ image: Collectors will find the new 'S' registration plates attractive]
Collectors will find the new 'S' registration plates attractive
The motor industry has agreed to pay for the changes to March and September.

In 2001 a new Euro style registration will replace the current system.

The proposed new number plate system will look like this: ABC 12 DE

The first three letters will be random, while the number will be the age identifier, changing every six months, and the last two letters will indicate the area where the vehicle was first registered.

Move welcomed

The decision to change plates twice a year has gone down well in the trade.

Car firms are relieved that they they will not have to meet the enormous surge in demand which is thought to cost some £50m in overtime, storage and distribution costs.

The Society of Motor Manufacturers and Traders (SMMT) said the change would create a "win-win situation for all concerned."

[ image: Showrooms are full to overflowing in August]
Showrooms are full to overflowing in August
SMMT president Ian McAllister said the new system was a "sensible and welcome change" which would "smooth out car sales" and the easily recognisable regional identifier would hopefully help the police fight car crime.

Vauxhall executive director Ian Coomber said his company also welcomed the decision: "Our customers will be the winners because we can offer them even better service by sensibly spreading new car sales throughout the year."

Ford's Iain Jane said it was a sensible move: "When you talk about delivering about 40% of the cars in a short period of becomes a tall order to do it properly."

Any drawbacks?

Some industry analysts believe the change will depress the value of used cars as new cars start to depreciate more quickly.

This could hit the market, especially in September 2001 when buyers could hold off buying until the new European-style plates are available.

Consultant KPMG has also said that without the focus of August registrations, the car market could start to drift.

It has predicted a fall in annual new car sales of around 50,000 leading to a loss of some 10,000 jobs in the industry.

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