Market buoyant despite falling sales

Despite the current economic uncertainty and the reality of falling sales, the motoring industry is in buoyant mood, according to the National Franchised Dealers Association.

Director of the RMI National Franchised Dealers Association (NFDA), Sue Robinson, was commenting on car sales figures for May today.

"Current economic uncertainty, and increasing household costs mean that many consumers may be taking a 'wait and see' attitude on all major purchases, but growth in some new car segments shows that there is still a lot of life in the new car market," she said.

While overall new car sales dropped 3.5 per cent in May to 179,272 units, the mini segment saw a 120 per cent increase during the month.

Today also saw the Bank of England announce that the interest rate will remain at five per cent.

"It's good to see that the Bank of England has taken a cautious view on interest rates, and held the rate for June," said Ms Robinson.

"This will allow the most recent cut in interest rates to take effect. However, there is some concern that, with inflation on the rise and consumers reviewing their debt status, household spending may need some further stimulation."

"A further cut in interest rates would help business and consumers alike," she concluded.