New car sales in the UK rose again in October, bucking a bad trend on The Continent. While the overall EU auto market has its worst year in written history, car sales on the island are up for the 20th consecutive month. Nonetheless, the Financial Times is deeply displeased.
“UK car sales are showing signs of slowing from the breakneck growth of the past 20 months,” writes the pink sheet. What happened? “Growth in October was just 4 per cent, the first single-digit result for eight months,” says a disappointed FT. What’s worse, the UK Society of Motor Manufacturers and Traders, the industry association that keeps track of these things, forecasts anemic growth in 2014 and 2015, somewhere around 1 percent.
The misunderstood UK car market is becoming a victim of percentages. As the graph shows, the UK market had a swift and brutal 25 percent drop during carmageddon. The UK’s version of Cash4Clunkers, there lovingly called “Bangers 4 Cash,” lifted sales, which dropped again when the cash dried up. In 2011, sales started climbing back from a low level, often producing double digit increases. As the market approaches pre-disaster heights, and as sales compare with already high prior year levels, the inflationistic growth is reaching its limits.
Or as my old boss used to say: “Little growth a high levels beats 100% growth from zero.”