Tuesday, October 06, 2009
Strong increase in new car sales
Sales of new cars rose 11.4% in September compared with the same month last year, according to the Society of Motor Manufacturers and Traders (SMMT).
The new "59" registration plates were available from 1 September and 367,929 of them were sold in the month.
The SMMT said that conditions remained "challenging" but the market was being supported by the scrappage scheme.
Last week, the government announced it was extending the trade-in scheme from £300m to £400m.
"The extension of the scheme will help to sustain demand through the latter part of this year and into 2010," said Paul Everitt, chief executive of the SMMT.
"This will allow economic recovery to strengthen and safeguard valuable industrial capability."
The scrappage scheme allows people to trade-in a car that is more than 10 years old for £2,000 off a new vehicle.
The SMMT predicted that September would be the strongest month of the year for car sales, accounting for about 20% of the year's total.
The Ford Fiesta was the best selling car in the month for the seventh time in 2009, reflecting continuing strong demand for smaller cars.
It was the first time in five years that sales in September had beaten sales in March, when the year's other new registration number is released.
September sales rise thanks to scrappage
'Car sales figures confirm the third consecutive monthly increase in registrations, largely due to the vehicle scrappage scheme. The Government's response to RMI pressure to extend the scheme is stimulating the motor industry as a whole,' says Sue Robinson, Director of the Retail Motor Industry Federation (RMI), representing the UK's new car dealers, commenting on new car sales figures for September 2009.
New car sales for September 2009, announced today (Tuesday 6 October 2009) show that new cars sold in September 2009 were 11.4 per cent up on September 2008.*
According to Robinson, the scrappage scheme is having a positive effect on the whole market: 'Car dealers are reporting that the scheme is continuing to provide a halo effect for overall car sales, and is helping increase footfall into showrooms by general buyers as well as scrappage buyers.'
Latest Government figures show that 238,671 cars and light vans have been ordered through the scrappage scheme since it went live on 18 May 2009. With sales continuing to grow and the scheme starting to come to an end, the Government's injection of a further £100m funding for the scheme could not have come at a better time. The extension which the RMI campaigned for is essential to ensure the retail motor industry continues to thrive at a time of economic uncertainty.
Robinson adds: 'The scheme has been highly successful, and with an extension in place, we expect demand to continue for the latter part of the year.
Honda leads UK car industry revival
Honda's Swindon factory, just a few months after being shutdown for four months, now epitomises the rejuvenation of the UK motor industry, according to the Daily Telegraph.
The plant's 3,400 workers are building more than 300 cars a day for the global market and on Wednesday (October 7) will start production of the Jazz, Honda's best-selling car in Europe.
However, management is forecasting that sales next year will be flat at best on 2009 and is not expecting the market to return to 'normality' for 'a few years'.
Production at Swindon this year is expected to be 100,600 down on 174,535 last year and a capacity of 250,000. The downbeat forecasts are a reflection of the concern facing the motor industry when scrappage scheme incentives in Britain and other countries end.
Union leaders keep pressure on Vauxhall's new owners
Union leaders are keeping up the pressure on the new owners of car giant Vauxhall to protect its plants in Ellesmere Port and Luton.
Unite has held a series of meetings with Canadian car parts firm Magna International and UK government officials, which are set to continue over the next week.
Unite's joint general secretary Tony Woodley said there were still no guarantees for the long-term future of the two UK factories.
"The situation is very serious," he said, adding that there were continued fears that 1,000 jobs could be cut in the UK.
Mr Woodley said 25,000 jobs were dependant on the Vauxhall plants as 400 component firms rely on the carmaker for business.
"It is not economic to carry any surplus capacity in the industry, but we believe in sharing the pain." he continued.
Mr Woodley has already complained of a 'political stitch-up' after the German government offered a huge amount of money to Magna, which he claimed was aimed at securing jobs in Germany.
Without guarantees of future investment, there would be 'major problems' at the UK factories after 2013, he warned.
BMW relations with franchises at all-time high
Relations between BMW and its franchise board are at an 'all time high', according to Tim Abbott, UK managing director.
It is "very much 'we' rather than 'us' and 'them'. It's a collaboration," he added. "We've been very open. And we don't look at any programmes without talking to them. I think they've got faith in us and we've got faith in them."
Mr Abbott said as the recession hit in late 2008, BMW did a lot of work around bonus guarantees on volume and target bonuses so that dealers could concentrate on customers.
He credited the dealers with cutting costs and re-engineering business models to fit the changing market.
After employee cuts in 2008, dealerships are starting to re-employ sales staff and will continue to do so into next year.
He said profitability was better than last year, but declined to state figures. Dealers' qualms include the obvious struggle of selling premium price cars in a tough marketplace. Financial services have also been slow in reacting to a changing market.
But, Mr Abbott warned: "Recovery is slow. It's just beginning to get pace, but it's one step at a time and dealers want to be sprinting."
Europe clears GM's acquisition of Delphi
The European Commision has approved the proposed acquisition of Delphi's auto electrics business by General Motors.
The EC ruled under merger regulations the takeover would not significantly impede effective competition in the European Economic Area.
GM wants Delphi's mobile electronics and transportation systems. It got EU approval in August to buy Delphi's steering operations.
Delphi is expected to emerge from Chapter 11 bankruptcy protection within the next few days.
It filed for court protection in 2005. It will exit as a new company with just three of its predecessor's 33 US manufacturing plants. It now has 21 factories in China.
Its global workforce has shrunk from 180,000 to 100,000 employees.
After its emergence, Delphi will be controlled by a group of more than 50 banks and hedge funds whose loans kept it afloat during the bankruptcy proceedings.
General Motors, which has contributed $12.5bn to keep Delphi afloat over the past four years, will have a small equity stake.
Delphi was spun off by GM in 1999, and ìs its biggest supplier.
DATED: 06.10.09
FEED: AM
VW & Fiat review Magna links
Volkswagen plans to end or sharply reduce its ties with parts manufacturer Magna after the Canadian group's takeover of Opel/Vauxhall.
According to reports in German newspaper Der Spiegel, VW purchasing chief Francisco Garcia Sanz will meet Magna boss Siegfried Wolf in the next few days.
Volkswagen, which buys two billion euros of parts from Magna every year, does not want its rival deducing from VW's orders what might feature in future models, it adds.
The threat to halt orders from Magna would also apply to luxury sports car maker Porsche, which now belongs to the Volkswagen group.
The development follows Chrysler's decision reported on Wednesday not to renew its contracts with Magna for the production of vehicles for the European market.
A spokesman for Fiat, which recently bought Chrysler, said that in future the cars would be built at the Fiat-owned Bertone plant in Italy.
The Opel takeover has raised concern among competitors who do not want to see a key supplier transformed into a direct rival.
"Until now, we have had a good cooperation with Magna," Friedrich Eichiner, finance director at German luxury car maker BMW, told reporters at last month's Frankfurt motor show.
"But the strategy has changed," he added. "We must consider which technologies are going to fall into the hands of a competitor."
Ferdinand Piech, head of the supervisory board at Volkswagen, Europe's biggest car maker, also said: "From a business point of view, we don't like it when a supplier becomes a competitor."
Volkswagen threatened to review its supplier contract, with VW chairman Martin Winterkorn saying: "We will examine our model of activity with Magna."
For the Canadian group the deal represents a strategic shift away from being just a parts supplier to many auto makers and an assembler of vehicles for brands like BMW.
Wolf has stressed that his group would establish "a strict separation between the supplier Magna and activities tied to Opel."
He pledged to respect the "protection of confidentiality" expected by Magna's partners.
The head of German luxury brand Daimler, Dieter Zetsche, has said he has "no problem" with it as "Magna has confirmed again and again" the principle of two separate groups operating side by side.
Ford Europe chairman John Fleming also told AFP: "Magna is a good supplier to us, we'll continue to work with them to make sure we have separation."
DATED: 06.10.09
FEED: AM
September registrations 14% increase
Early indications are that a busy final week in September drove car registrations from a 2% dip at week three to a 14% increase on September 2008's total sales.
Strong manufacturer incentives and scrappage discounts, plus publicity surrounding scrappage's extension, are understood to have boosted demand.
The rise is expected to be confirmed officially by the SMMT tomorrow.
One brand which enjoyed a strong performance was Mazda. Its 11,372 registrations were the highest monthly total ever achieved by Mazda UK, and gave it a 3% share of the month's total market.
DATED: 06.10.09
FEED: AM
Financial service business grows
Financial service business volumes have grown for the first time in two years.
PricewaterhouseCoopers and the Confederation of Business Industry (CBI) surveyed banks and building societies to show a 7% increase in the three months to early September.
PwC and the CBI said that future demand is still “a major concern”.
Out of the financial service businesses surveyed, 36% said they were more optimistic about their business situation than in June.
Andrew Gray, head of financial services consulting at PricewaterhouseCoopers, told the BBC: "For the first time since June 2007, banks are experiencing an upswing in confidence.
"Confidence is, in part, offset by concerns of further impairments and the impact of 'tougher' regulation."
DATED: 06.10.09
FEED: AM
