United Kingdom Autos Report Q1 2008

BMI has restated its full-year sales estimate for the UK car market in the latest despite the upturn in new car registrations reported in November 2007. During that month, new car sales jumped by 2.2% year-onyear (y-o-y) to 158,735 units, while they rose by 2.49% y-o-y during the period January-November 2007 to 2,266,047 units. While industry observers such as the UK's Society of Motor Manufacturers and Traders, SMMT, raised their outlook for the remainder of the year, BMI expects sales to have slowed in December, a traditionally slow month for car sales.

By carmakers, Ford maintained its lead on the market even though the company's new car registrations tumbled by 10.7% against the same month a year earlier to 21,072 units. Ford's sales were nevertheless buoyed by the popularity of models such as the Focus, which, during the period January-November 2007 lifted the carmaker's sales to 327,126 units. Second-ranked Vauxhall continued to close the gap on Ford, with sales during the 11-month period of 311,061 units, an increase of 9.11% y-o-y. Volkswagen completed the top three, with its sales edging up by 3.35% y-o-y to 184,116 units.

As mentioned above, BMI maintains its sales forecast of 2.309mn units given that December is a traditionally slow month during which sales will decline. We have also adjusted our forecast for imports to reflect the close relationship between these two items. We are also cautious going forward given that questions are being raised about the sustainability of current levels of consumer spending. According to BMI research, personal debt levels continue to increase and now stand at a massive GBP1.3trn.

Consumer confidence may fall this year, particularly given the high exposure to shocks such as the recent credit crisis. Indeed, SMMT is preparing for a tough time in early 2008.

In terms of industry developments, Fiat continues to target sales growth in the UK. According to industry sources, the Italian carmaker will open a new dealership in the heart of the country's capital in early 2008.

Fiat Marylebone will be located close to London's busy Oxford Street ensuring maximum footflow, with customers being able to learn more about the carmaker's complete range of vehicles.