Car sales shrug off gloom

Low prices and cheap finance deals are luring buyers

Sales of new cars continued to surge ahead last month, defying fears that the sector would be hit by the economic slowdown.

New figures from the Society of Motor Manufacturers and Traders (SMMT) showed sales up 21% in October on the same period last year.

Best selling cars in UK - October 2001

1, Ford Focus

2, Vauxhall Corsa

3, Renault Clio

4, Renault Megane

5, Vauxhall Astra

6, Ford Fiesta

7, Peugeot 206

8, Ford Mondeo

9, VW Golf

10, Vauxhall Vectra

Source: SMMT

The SMMT said private buyers were being lured by lower prices, new models and competitive finance packages.

"While some analysts had predicted a slump, with claims that showroom traffic had slowed to a trickle, the reality has proved to be quite the opposite," said the SMMT's chief executive Christopher Macgowan.

"We have seen huge market growth, once again led by private buyers."

On the up

New car registrations by private buyers leapt 28% last month, while demand from fleet and business buyers also rose.

The SMMT said it expected sales of new cars to hit 2.38 million by the end of 2001, a 7% rise on the previous year.

Despite the strong sales figures, Mr Macgowan accepted that the current trend was unlikely to last.

"No one would suggest that 13 consecutive months of growth will last forever.

"But equally we need to be careful not to talk down a very strong market for new car sales. Be sure that 2001 will be a record year."

Tightening purse strings

There are signs though that UK shoppers are beginning to tighten their purse strings, which could hit future sales.

Last week the Confederation of British Industry said retail sales growth fell in October to its slowest rate this year.

Other surveys of consumer confidence have suggested it has fallen because of the terror attacks and the gloomy global economic outlook.