New car registrations rise 11% in first half of August: Increase will not sustain production levels

CAR registrations in the first 10 days of August were up by 11.6 per cent on the same period last year, consolidating the improvement already shown this year. The increase is not, however, sufficient for domestic car makers to maintain production levels in the face of falling Continental sales.

The Society of Motor Manufacturers and Traders broke with precedent by publishing the figures - it usually restricts itself to monthly statistics. More than 249,000 cars were registered in the 10-day period, about 15 per cent of the total for the year, as buyers swooped on the new L-registered models. Ford says it sold 38,000 on the first day of August - more than the total sale for all makes in July.

Geoffrey Pelling, deputy chief executive of the SMMT, said the increase 'clearly indicates that market recovery is continuing'. The SMMT says sales are on course for at least 400,000. Others, including Vauxhall and Lex Service, the country's biggest dealer, predict 415,000.

A spokesman for Lex said the sales rise was 'spot on the trend for the last 16 months', which showed a steady acceleration in the market. 'It's a function of people keeping their cars for so long that they feel they have to change,' he said.

The average price Lex has been paid for cars is up 4 per cent on last August, when there was heavy discounting. However, the pricing structure has been overhauled this year, with most manufacturers cutting their dealers' discount to give them less scope for haggling.

Although Ford took the first three spots in the sales table with the Escort, Fiesta and Mondeo, its market share was 21.3 per cent, compared with 22.5 per cent for the same period last year. This reflects weaker Escort and Fiesta sales, which have not been balanced by increased sales of the new Mondeo.

Vauxhall took the next three positions, with the Astra, Cavalier and Corsa, but raised its share by one point to 16.8 per cent. A spokesman said it had increased its sales volume by 19 per cent in the past year. Rover's share was up half a point at 12 per cent, Peugeot was steady at 8 per cent, and Renault achieved the largest volume increase, pushing its share up from 5 per cent to just above 6 per cent.

The new figures bring the car market almost back to the 1990 level, but are still a long way off 1989, when 307,237 cars were registered in the first 10 days of August. Nor are they enough to compensate for the fall in Continental sales. Vauxhall's production this year is down 11 per cent on last year and it has recently announced it is keeping its Luton factory idle for an extra week this month. Demand for its cars in Germany has suddenly dried up, and the proportion of cars it is exporting is down from a third at the end of last year to about 18 per cent now. Production at Ford's Dagenham plant was also cut earlier this year, from 1,200 a day to 950.