Member Article

Car Finance Industry Continues to Surge

Today more and more money is being invested in the car finance industry. The number of companies working in this particular field are continuing to grow as they become more profitable. However, investment in the car industry itself as a whole has declined although car finance is still on the up and up.

Due to the car finance industry, more people are driving. With the help of a £car finance company you can also get behind the wheel.

Why has car industry investment declined?

This is a good question for people interested in this subject. Investment in the car industry was down by £half in the first six months of 2018 compared to 2017, due mainly to Brexit, or so industry leaders believe. Many companies are not investing in the UK because of Brexit. Car manufacturers are now unsure about UK operations due to suppliers and car plants on the continent.

Car sales are going down in the UK due to the Brexit uncertainty, buyers are sitting on the fence. There was a fall of 6.8% during January-May 2018 with only 1.07m new car registrations, compared with 1.15m in 2017. That tells its own story about the current situation in the car industry.

With the USA putting tariffs on imported cars, plus the change from the internal combustion engine to hybrid or electric motors, car sales forecasts are even more downbeat. Manufacturers want to know how car parts will get from the continent to the UK. They don’t want deliveries sitting in attics because extra paperwork is needed to clear border controls.

Brexit has a lot to answer for

There’s a lot of frustration in many boardrooms around the world regarding the slowness of Brexit. The trading environment is becoming hostile especially within the car industry. Statistics show that there are approximately 856,000 UK linked motor industry jobs at the moment although only about 186,000 on the production lines.

It’s hoped leaving the EU will not make the UK car industry suffer like the Italian motor trade suffered due to economic collapse. Many Italian car manufacturing companies moved to the Czech Republic and Turkey as a result of uncertainty.

Car credit companies to the rescue

Lots of people on low incomes just cannot afford to buy new or even used vehicles. This is where car credit companies can come to the rescue. The consumer new car finance market £grew by around 15% in value and 10% by volume in the month of May compared with the same period last year. Private new car sales were 89.3%, unchanged with the same period last year.

In May 2018 there was a new business growth of 12% by value and 9% by volume. The Head of Research and Chief Economist at the FLA indicated that a recovery in April and May. This is a good sign there is going to be an increasing demand for new cars. Consumers can now turn to car finance companies for the opportunity to buy a new or used motor, so good news all round for the car industry.

This was posted in Bdaily's Members' News section by Mick Bunks .