Report warns car industry to brace itself for a tough year

News release

Contact:
Serj Heera
PR Manager, Automotive
+44 (0) 115 992 2773 Tel
serjeet.heera@uk.experian.com Email

report warns CAR industry to brace itself for a tough year

Nottingham, UK, 22 May 2009 - Despite measures to stimulate the UK economy and the car market, 2009 is set to be the most challenging year for the automotive industry since 1991.  Although the sharp increases in prices on essentials during 2008 finally subsided almost as sharply towards the end of the year, consumer spending did not resume as quickly and will continue to impact car sales throughout 2009.

This is one of the key findings from the latest Automotive Market Insight Report from Experian^®, the global information services company.

Experian’s report highlights consumers’ cautious approach to big-ticket purchases, but also where the pockets of opportunity lie for the automotive sector – such as increased activity in the used car sector.

Providing an in depth view on how the UK’s automotive industry was impacted during the final six months of 2008, Experian’s report explores how these factors have influenced the current shape of the industry and how they will continue to influence it in the coming months.

Drawing on Experian’s wealth of consumer and business data and analytics, the report identifies some of the following trends:

• Consumer sentiment, which had remained subdued towards the end of last year, appears to be picking up in the used car sector this year, indicating that cost conscious consumers are looking into less costly alternatives to new cars.  The new scrappage scheme may help stimulate the same in the new car market.
• There has been a big backlash against larger vehicles in the new car sector as cars, such as 4x4s, plummeted in sales.  Demand for the smallest models on the market, however, shot up.
• Fraudsters are increasingly turning their attention to the automotive industry, as the number of fraudulent car finance applications detected by Experian increased by 51 per cent, compared to the last six months of 2007
• The launch of more eco-friendly cars plus the possible introduction of incentives to encourage more sales of electric cars is sparking a speedier move over to the green agenda.

Kirk Fletcher, Managing Director of Experian’s Business Information and Automotive divisions, said: “The current state of the economy is seeing some interesting trends emerge in the automotive industry and among car buyers.

“One of the most powerful tools at businesses’ disposal today is information.

Experian’s second Automotive Market Insight Report highlights how our information can help shape today and tomorrow’s automotive business strategies by providing an in-depth view into the factors at play in the marketplace.”

The free report from Experian can be downloaded on http://www.experianautomotive.co.uk/Automotive-Market-Insight-Report-May09.aspx