Mid-summer is usually the worst time for sales, but this year was bad by any measure. The figures prompted the Society of Motor Manufacturers and Traders (SMMT) to call on government to kick-start consumer confidence. Then the large waves of the credit crunch began to lash against the shore with the nationalisation of Bradford & Bingley and Toyota’s decision to cut production at its Burnaston plant unlikely to restore consumer spending. The question is what are car-owners and buyers thinking now; and what effect will this have on tyre sales?
Back in August, the only part of the market to grow was the mini segment, recording a year-to-date increase to 37.1%. At the same time diesel engines continue to grow in popularity and now account for around 43% of 2008’s new car market.
The same trend was reflected across Europe. August figures show a 3.9% reduction in new passenger car registrations in the period January-August 2008 compared with the same period in 2007. August’s data shows that new car registrations fell 16.5% in Western Europe, with Ireland (-41.6%) and Spain (-41.3%) nursing the greatest hemorrhages. Portugal managed to post a growth of 4.8% in new car registrations, though it was the only country to do so. Italy (-26.4%), the U.K. (-18.6%), Germany (-10.4%) and France (-7.1%) all saw falls.
In new EU member states, monthly demand also dropped compared to August 2007, though less steeply at 8.7%. The Czech Republic (+0.5%) and Poland (-0.9%) saw relative stability, while Hungary (-23.3%) and to a lesser extent Romania (-9.0%) found things tougher going.
Speaking in a broader sense on the year-on-year January-September period comparisons, 2008’s decline was led by a 4.4% drop in Western Europe, where modest growth in France (+2.9%) and Germany (+1.7%) was drowned out by the drops in Spain (-21.1%), Italy (-12.0%) and the U.K. (-3.8%). Demand in new member states rose 2.7%, with growth in Poland (+9.1%) and the Czech Republic (+8.2%) eclipsing the downward trend in Hungary (-4.9%) and Romania (-3.5%).
Overall there has been a clear shift in car selection toward smaller cars across Europe, driven by emission regulations and higher fuel prices and lower. Deutsche Bank analysts put the falls down to “eroding consumer sentiment and recessionary fears.” All this means there is likely to be an increased OE demand for smaller size tyres in the future and a larger proportion of older vehicles on the road as driver seek to make the most of their purchases.
With more vehicles per capita than our European counterparts, some people have romantically described the U.K. as a nation of car lovers. However, according to a survey carried out by GfK NOP in conjunction with Nationwide Autocentre, it appears that Britain’s love affair with cars is dwindling, with nearly 30% of men and 20% of women now actually resenting their vehicles.
Rising fuel costs and road tax (74% and 53% respectively) were cited as the main reason for the ill feeling. However, those in the tyre industry will be interested to hear that 39% of motorists resent their car due to its environmental impact more than even the congestion charge. In addition to the growing trend towards smaller new car sizes, it seems that economical tyres are also likely to grow in popularity – 50% of the country is spending money on essentials like food and clothing instead of maintaining their vehicles. (Tyres & Accessories/Staffordshire, U.K.)
