Is there something seriously wrong with the UK new car market?

Here’s a peculiar conundrum for you. According to the European Automobile Manufacturers’ Association new car registrations fell 8.5% in January to the lowest level for more than 20 years – Registrations fell to 918,280 new cars, and the ACEA said it is the slowest January since its records began in 1990.

But in an amazing contrast, UK car buyers are seemingly clamouring for new cars, with January new car registrations up over 11.5% on last year!

In fact a closer look at the figures reveals and even weirder picture. In the major markets,  only the UK posted growth, while a substantial downturn prevailed in Germany (down 8.6%), Spain (down 9.6%), France (down 15.1%) and Italy (down 17.6%). In terms of actual numbers of cars registered figures, Germany remained the largest market with 192,090 new registrations, followed by the UK (143,643 units), France (124,798) and Italy (113,525). Spain registered 49,671 new cars, which was slightly less than Belgium (50,684 units).

So what’s going on? Why is the UK new car market apparently so at odds with what’s going on in the rest of Europe?

We’ve spoken before about the old problem of large scale dealer pre-registration rearing is ugly old head again and skewing the figures (Distress busting initiative anyone?) but we’re fairly sure that the UK market is not immune to that, so what else could be happening? Is it just that our market is just more buoyant and resilient than the rest of Europe (even better than Germany?!). Well I don’t think that’s the reason at all and it may be more likely down to a fatal flaw in the British culture that could well be, in the parlance of the tabloid press, a ticking time bomb.

There is no denying that UK consumers tend to be a little bit different than their continental counterparts – which, after all is not necessarily a bad thing. But should new car sales be taken as an indication that the UK economy is in some way more resilient, or indeed in better shape than mainland Europe? Absolutely not!

In fact, according to some financial analysts, it’s quite the opposite.

Some analysts have likened the UK car market to the toxic sub-prime mortgage market in the US, with the obsession with new homes, financed on “worry about it later” credit having more than a passing similarity with our own obsession with buying new cars. Indeed it could be suggested that it is all a symptom of a much bigger and more worrying story.

Could it be that consumers are being duped or walking blindly into bad investment decisions to satisfy their short-term pleasure urges, thereby keeping the finance industry in the style and opulence to which they have become accustomed? Is this being allowed to happen because of a dangerous obsession at the heart of British society, an obsession that has been festering for quite some time now?

Think of the way everyone blindly and avariciously hanker after the latest mobile phone, signing up for expensive contracts just to get their sweaty hands on the latest, greatest model. Think of how TV’s keep getting bigger and now if you only have a 37 inch model then you are somehow frowned upon (it should be noted that houses are not keeping up with the growth in size of TV’s and walking into some peoples living rooms is like walking into to some sort of shrine to the TV god such is its dominance).

I digress but it does appear that somehow we have allowed this attitude to take complete control of our society and it seems that the new car market is now not immune.

When you think about it for a moment it’s rather disturbing.