Money News
As the latest Regional Planning Report from Experian, the global information services company, forecasts a further downturn in house prices and an increase in unemployment for the first time since 1992, the UK could start seeing a change in demand for 4x4s.
Despite rising interest rates, growing debt and environmental concerns over the last few years, larger engine cars, such as 4x4s, MPVs and sports cars, have managed to retain their popularity and have continued to grow in sales. However, with a squeeze on consumer spending, this trend is likely to change quickly.
The latest Regional Planning Report from Experian has highlighted a significantly faster downturn in the housing market over the last 6 months and has forecast a decline in UK house prices of 7.6% over the next 2 years. The report has also forecast UK GDP growth to slow down to 1.8% in 2008 and further still to 1.5% in 2009, affecting the level of job creation in the UK.
Kirk Fletcher, Managing Director of Experian's Automotive division, said: "A car is arguably the second biggest purchase a consumer will make and financial concerns were already affecting used car sales, which have been falling since 2005."
Fletcher adds that more and more consumers have been delaying their car purchase decisions. However, there have still been pockets of growth seen in the 4x4, MPV and sports car segments. But while sales are still strong in these segments, they are not as strong as in previous years.
"The introduction of higher tax on these vehicles and the consequences of the global credit crunch, highlighted in the latest Regional Planning Report, could finally be the factors that push these segments back," says Fletcher.
15 May 2008 © Moneyextra.com
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