New car sales down in December

New car sales continued to fall in December prompting dealers to offer better deals in an attempt to get buyers back in to the showroom.

Official figures from the Society of Motor Manufacturers and Traders (SMMT) showed that only 108,691 units were sold during December. This is down 21.2 per cent, or 22,825 on December 2007. The drop means car sales have fallen for the eighth month running with total sales for 2008 down by 11.3 per cent, over 250,000 units less than 2007, and is the lowest since 1996.

Although down on December 2007, last month's figures are an improvement on the 36 per cent drop seen in November. A number of factors - such as the cut in VAT at the start of December - have contributed to getting buyers back into showrooms, while unprecedented deals such as - 'buy one car, get one free' offers and up to £13,000 off a 4x4 - make the prospect of a new car attractive to anyone with cash to spend.

There are currently big price cuts from a number of supermarkets and brokers on brand new cars, including £3000 off a new Volkswagen Polo and a £5000 saving on a new Ford Focus. Main dealers are also offering a range of deals including free insurance, 0% finance and many other offers as they attempt to fight off the sales slump.

The outlook for 2009

Car sales are expected to continue falling in 2009, although not at the rates seen over recent months. The knock-on effect is that promotions and price cuts will also continue. But as many manufacturers extend their factory closures and slow production, the incredible deals that have been seen in recent weeks are likely to peter out. As excess car stock is sold and supply is reduced to meet with decreased demand, buyers are likely to see fewer discounts. 

The best selling cars in December

1 Ford Fiesta 7204 2 Vauxhall Corsa 6322 3 Ford Focus 5561 4 Vauxhall Astra 5005 5 Vauxhall Vectra 4003

The worst hit manufacturers in December

1 Chrysler -74.6% 2 Mitsubishi -66.9% 3 Subaru -65.2% 4 Lexus -50.3% 5 Suzuki -52.6%