Ernst & Young’s UK Head Of Automotive On The SMMT’s Car Registration Figures For February 2009
Ernst & Young, a global leader in assurance, tax, transaction and advisory services has responded to the latest SMMT car registration figures
Eric Wallbank, Ernst & Young’s UK head of automotive, gave his views on the SMMT’s car registration figures for February.
Wallbank stated, “The 21.9% fall in car registrations in February was less severe than many were expecting, and is better than the January result, which saw a 31% decline over the prior year. Nevertheless it is a worrying indication of the rapidly declining health of the UK’s automotive industry, and there can be little doubt that if these figures continue, we will see further distress and job losses in the sector over the coming months. Urgent action is now required, but in what form and at what level this should be taken is not clear.
Wallbank added, “Scrappage schemes have been put in place by governments in the other ‘Big 5’ Western European markets, and these do appear to have helped stimulate the market. In Germany, for example, where consumers are being offered a 2,500 Euro incentive to scrap their old cars and replace them with new fuel efficient models, car sales increased by an impressive 22% last month. However, while over 60% of the cars sold were German brand vehicles, the sales of non-German brands increased 48% as a result of the incentive programme – so country-level incentives are benefiting manufacturers across Europe and beyond. When you consider that most cars manufactured in the UK are exported, and that the majority of UK car sales are imports, you have to question whether a UK scrappage scheme would be of similar benefit to manufacturers producing in the domestic market.”
Wallbank concluded, “With this in mind, I think calls for a European-wide support package for the automotive industry seem sensible, since a European-wide scrappage scheme would benefit all the European producers. A real difference could be made if the European Union adopted a truly coordinated approach.”
Simon McBride
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