New cars sales not as bad as first predicted, says Barclays

Barclays has revised its full-year new car sales forecast upwards, despite predicting a tough period of trading in the latter half of the year.

Forecasts for the UK economy have been revised down in recent months as the effects of the disruption in financial markets on the wider economy become apparent.

Research carried out for the bank now suggests that UK economic growth will be around 1.7% in 2008 and 1.8% in 2009, well below the 3 % of growth recorded in 2007. But, despite the downward economic projections, Barclays said registrations of new cars had been remarkably resilient and year-to-date sales were on a par with 2007.

As a result, Rick Parry, Barclay’s relationship director for the motor sector, said: “We have revised up slightly our forecasts for the full year in recognition of this to a fall of 3% for the year as a whole. But we still expect market demand to weaken in the second half of the year in response to the current low levels of consumer confidence and as household disposable incomes are squeezed by a rise in inflation.”

The Society of Motor Manufacturers and Traders has predicted that 2008 new car sales will total 2.335 million, down 3% on last year’s total of 2.404m registrations.

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