A report has suggested that in spite of over two million cars being sold in the UK in 2010 - a 1.8% increase on the previous year - the industry may face "extremely challenging" financial situations in the coming months.
According to theSociety of Motor Manufacturers and Traders (SMMT), sales had risen to 2,030,846 last year, a growth of 35,847. However, the year witnessed varying sales figures as a result of the end of the Government's scrappage scheme in March.
Over 100,000 cars had been picked up by owners last year thanks to the scrappage scheme, accounting for 5% of the total figures sold.
Data reveal that while the first six months of 2010 had witnessed a near-20% increase in sales, the latter half faced a 13.8% decline.
The study also discovered that in December 2010, car sales figures dipped to 123,817, an 18% decline on the same period a year ago. The market remained below expectations.
The best-selling car in December was the Vauxhall Astra although the Ford Fiesta was the top-selling model for the whole of 2010, with sales of more than 100,000.
Paul Everitt, chief executive of theSMMT, said 2010 was a "year of recovery" for the motor industry, adding: "Economic conditions remain extremely challenging, but industry expects demand to strengthen in the second half of the year.
"Competition in the retail sector will intensify as the industry seeks to re-balance demand across its new and used car and service and repair business.
"UK motor manufacturing recovered particularly well in 2010 and the outlook is for further steady growth this year."
TheSMMT pointed out that, although car sales were up by 1.8% last year, the 2010 market was still the second lowest in the past decade and almost 375,000 down on the 2007 figure.
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