Car dealerships in the capital can expect to sell more smaller cars and electric vehicles as Londoners look to make commuting cheaper, according to business development consultant at the Retail Motor Industry (RMI).
Sales of new cars increased by seven per cent in August, the first time sales figures have gone up since the summer of last year, according to the Society of Motor Manufacturers and Traders (SMMT).
A total of 59,346 new cars were registered in August, the figures show, but the SMMT said the outlook for traders remained “challenging”.
RMI head of business development Louise Wallis said car dealerships within the M25 remained confident of boosting their trade, despite generally finding business quite tough in recent months.
“The main issue has been getting consumers into the showroom,” she said. “They know it’s going to be a tough period of time over the next few months or the year, but they are confident it’s a short term issue and in the longer term business will pick up.”
Rising fuel costs have made commuting to work more expensive for Londoners who drive to work, but Wallis does not believe people will ditch their cars just yet.
She believes Londoners who drive will be reluctant to give up the freedom of using their own transport and will look at ways to save money by driving smaller cars, rather than making the switch to trains and buses.
“Different types of cars will be bought as people look for more affordable driving. Electric cars could become more popular,” said Wallis. “The marketplace for electric cars is in urban areas like London, that’s where those cars are bought and sold. There network is there for them to be recharged and the slower driving environment is perfect for them.”
The trend of buying smaller cars has been seen across the country in the SMMT’s figures. The Supermini segment accounted for 37.3 per cent of the new car market last month, up from 17.6 per cent.
SMMT chief executive Paul Everitt believes September will be a key month for new car sales. He said: “August represents a relatively small share of the new car market and the September new 61-plate registrations will be far more important for vehicle manufacturers and franchised dealers.
“The September new car market is always important for the UK motor industry, accounting for around 17 per cent of the full year’s registrations.
“Consumers are nervous about the future, but with industry offering unprecedented improvements in fuel economy, competitive finance offers and a wide variety of new models, buyers will find there is something to suit every taste and pocket.”