Why car sales should see long-term growth
25 November 2013
New car registrations have proved a hot topic thanks to month-on-month rises and a market running 10% up year-on-year. But theres also been a trend in predictions that market growth over the coming years promises to be minimal, at best.
Without getting into the argument about registrations versus sales, some pundits have also given cause for optimism over the future of new car sales in the UK, particularly in the longer term. One such view came to light a week ago, when I attended the annual conference of the Institute for Car Fleet Managers.
During one of the discussion sessions someone raised the topic of the HS2 rail project. And while the audience was generally against the idea when compared to investment in high-speed broadband, one expert pointed out that the UK population was set to grow by 11% in the next 15 years and that investment in all transport was needed to cope.
It may not seem like much. And the population growth wont come from the birth rate. It will be because people live longer. The advantage for retailers is that this older generation drives and can afford to drive. Whats more, the average new-car buyer in the UK is aged over 50.
A few days later I read of Birmingham City Councils 20-year transport plan. It contained the line that, on current predictions, the population of the city will grow by 20% to 1.2 million by 2031 and that car ownership would increase by 80,000 vehicles.
This begs the question, where will these cars come from? To which the obvious answer is, from franchised retailers. While this is looking a little further ahead than most retailers tend to, it offers fresh hope for the industry. Thats something you dont hear often enough.