January sales in the UK were however just ahead of SMMT’s forecast for the month. Several factors in particular have contributed to the decline including the rise in VAT to 20 percent, uncertainty over the economic setting and potentially a consequence of the bad weather in December. However, the downturn looks to be mainly reflective of the loss of the state-supported Scrappage Incentive Scheme (SIS). In January 2010, 18 percent of the UK market was contributed to by the SIS. With those registrations stripped out, the volume in 2011 was up 8 percent on last year. The loss of the SIS is expected adversely to affect the market during the first half of 2011. Overall volumes are forecast to decline by 5 percent in 2011 to 1.93 million cars.

Many sales types recorded falling volumes in January, with the private market showing the steepest decline. Demand for the mini and supermini segment, boosted by the SIS a year ago, fell sharply this January. Demand for executive, luxury, MPV and dual purpose segment cars however recovered strongly. Demand for diesel cars also rose and their market share was once again over 50 percent in the month. Alternative fuelled cars matched their record share of 1.4 percent of the market.

Fiat Automobiles, one of the main beneficiaries of the SIS a year ago, saw a total 2,488 registrations in the UK during January, and when that is compared to 3,972 units for the same period a year ago, it added up to a year-on-year slump of 37.26 percent, more than three times the overall market's decline. The other volume brands to be losers on this market for the month just gone included Hyundai (-45.35 percent), Kia (-38.37 percent), Renault (-33.82 percent), VW (-26.23 percent), MINI (-24.40 percent), Toyota (-24.35 percent), Mazda (-23.52 percent), Volvo (-20.03 percent) and Jaguar (-17.77 percent). Fiat's share of the UK market for the first month of the year thus slipped from 2.73 to 1.93 percent year-on-year.

By contrast Alfa Romeo enjoyed a very strong month versus the same period a year ago, driven once again by the new C-segment Giulietta hatchback which capably made up for the erosion in demand for all the brand's other products. However Alfa Romeo's January year-on-year rise of 59.09 percent was on the back of only 595 cars as last January it had seen only 374 registrations. There were very few big winners on the UK market last month, but as well as Alfa Romeo, BMW (+67.23 percent), Mitsubishi (+40.22 percent) and Mercedes-Benz (+24.55 percent) all made significant gains. That sharp rise in sales of nearly two-thirds helped Alfa Romeo to see it's market share for January climb from 0.26 to 0.46 percent year-on-year.

Abarth also enjoyed a positive start to the year, 78 cars sold during January was 10 units up on the same period last year and added up to a 14.71 percent rise. It all meant that the Scorpion brand's share of the UK market for the opening month of the year was up slightly from 0.05 to 0.06 percent year-on-year.

The Chrysler Group, now 25 percent owned by Fiat and with a full merger likely to happen in the next two or three years according to comments made by CEO Sergio Marchionne over the weekend, suffered it's usual torrid month in the UK: both it's surviving UK market brands saw their sales slumping by more than a half, although their presence is now little more than nominal. The Dodge brand, which has been withdrawn from the market, and has been just shifting accumulated stocks in recent months, finally announced it's departure with zero registrations for the first time (23 units were sold by the brand in the previous month, December). That left the Chrysler brand on 56 units and Jeep on 80 units for January, the two divisions recording almost identical falls, -52.54 and -52.94 percent, respectively.