August’s motoring news digested

Posted on September 10th, 2013 by Rob Marshall

rm_aug_blogFilling the headlines last month were further reports that new car sales continued to escalate to such an extent that the Society of Motor Manufacturers and Traders has revised its forecast, which predicts a year-end 8.3% increase, over sales from 2012. Naturally, many car manufacturers’ press offices went crazy, eager to crow about the apparent success of their brands. Some have been genuine. Kia, for example, sold almost 500 more vehicles in one month, compared to last year. At the other end of the scale, Mitsubishi tried to disguise its paltry 306 vehicles total, including commercial vehicles, that were registered in August, by talking in percentage terms. It claims that Mitsubishi is the UK’s fastest growing car brand and that last month’s sales were up by 46% but somebody forgot to point out to the Japanese company that almost half of such a trifling number results in a figure that is hardly worth mentioning.

Even so, the figures that the majority of car companies quote are the registration numbers, which include not only retail sales but also lump-together in-house registrations, dealer demonstrations, press fleets, management cars and the rest, so the registration numbers can be manipulated. While the true sales figures are nowhere near those of pre-recession days, they are rising and providing some good news for one sector of the motor trade.

HOW LONG WILL THE SUNS SHINE?

While new car dealers might be patting themselves on the back, Rupert Pontin, Chief Car Editor of the used vehicle values publication, Glass’s Guide, highlighted that the recent competitive new car prices, coupled with low PCP finance deals, free insurance and servicing, plus the average £2,000 that many people have received from PPI settlements, have fuelled the growth in registrations. Yet, Pontin questions how these deals will impact depreciation in three years’ time. He highlights the often-forgotten fact that “The success of new cars for a manufacturer is influenced heavily by what happens when they hit the used market. It has taken many years for some manufacturers to appreciate this and, at times, this element is forgotten in favour of short term gains.” Is Pontin suggesting that the motor industry is not looking further forward than the end of its own bonnet? Surely that cannot be the case…?

Meanwhile, I have always doubted the accusation that the UK new car market is treated as a dumping group by some carmakers, compared to other markets, but my opinion was not helped by the announcement from Dacia that its face-lifted Duster will be introduced at the Frankfurt Motor Show later this month, which will not be available to our market. Instead, we will be left with the old version. Therefore Dacia/Renault UK, what was the point in telling us?

FIDDLING THE ECO FIGURES

Meanwhile, the motorway-munching ‘Mondeo Man’ has celebrated his 20th birthday, after almost 1.5 million examples, of the car that replaced the much-loved Sierra, have been sold in this country to date. Ford was keen to tell the UK media that the latest Mondeo is far kinder to the environment, compared to the original. The company boasted that the current incarnation can achieve 65.7mpg, compared to 36mpg of the first Mondeo diesel of 20 years-ago. Yet, I wonder how accurate is Ford’s appraisal of the old car, considering that I used to average 50mpg, when I owned a first-generation Mondeo, which may have been less efficient but was smaller and lighter than the current monstrosity. Actually, I rather like the latest model but I question that the latest super-eco diesel version could even match its quoted fuel consumption figure in real life driving, let alone surpass it.

Yet, a far more serious environmental exaggeration was exposed last month, when ActionAid revealed that the UK government underestimated the cost of blending bio ethanol with petrol, so the UK could meet EU-set renewable road fuel targets, by £225million per year. The charity identified that the cause was inaccurate price projections of the alcohol element by government departments.

Apart from costing motorists more at the pump, ActionAid stated that the well-intentioned European policy of using biofuels is counter-productive environmentally and it claimed that, worryingly, the carbon dioxide increase, from producing and exporting fuel that is refined from plants, is equivalent to introducing 26 million more cars onto the road.

The charity also highlighted that six million hectares of land in certain African countries are under the control of European-based companies, to meet the increased demand for fuel, which, it says, is at the expense of food production. The charity insists that the UK government must remove its damaging biofuels target, although that is rather tricky, because the objective is implemented by the EU and not by British authorities.

Yet, an imminent vote in Europe will decide the biofuels policy for the whole union. We had better hope that the percentage is capped at below 5%, not only for the environmental and humanitarian reasons that ActionAid highlights but also because most cars are not designed to operate reliably, using such a high percentage of ethanol-laced petrol.