UK Car Industry Reveals Highest Sales Rise for 9 Years
British motorists are continuing to flock to the showrooms to take advantage of cheap finance and buy new cars. Figures just released by the Society of Motor Manufacturers and Traders (SMMT) show that UK car sales have risen by 10.6% in the first six months of 2014.
British motorists are continuing to flock to the showrooms to take advantage of cheap finance and buy new cars. Figures just released by the Society of Motor Manufacturers and Traders (SMMT) show that UK car sales have risen by 10.6% in the first six months of 2014. The rise is the highest recorded for nearly a decade, and it has also added to the longest period of consecutive growth that the UK motor industry has ever enjoyed.
Sales of new cars rose by 6.3% during the month of June alone, reaching 228,291 units. Ford performed well, with the Fiesta and Focus coming first and third, while Vauxhall’s Corsa came second in the sales charts. This increase pushed sales for the first half of the year up to 1.29 million vehicles, a rise of 10.6% on the same period last year. It is thought that consumers are being attracted by the easier availability of low-cost finance and the leaps in technology that have made cars much more frugal in their fuel consumption. This is also great news for used-car buyers. As most new-car buyers will be trading in their old car, it means that many more used cars are coming on to the market. With such a large number of used cars available, getting a good deal on one is more achievable than ever before, so there has never been a better time to land a great used car.
There was also good news for alternatively fuelled cars, such as hybrid and electric vehicles. Sales of such cars recorded a rise of 51% in the first half of 2014, reaching 23,337 units. This was an excellent performance, especially against a background of uncertainty over the government’s commitment to extending the £5,000 grant that electric cars have been attracting. June of this year has been the 28th month of consecutive car sales increases, breaking all records since the industry started recording such numbers in 1959.
The chief executive of the SMMT, Mike Hawes, admitted that the increase in sales so far in 2014 was greater than the organisation had predicted. The SMMT had forecast a yearly increase in car sales of 6%, resulting in a predicted total of 2.4 million cars. Mr Hawes explained: "Improving economic conditions have helped propel the UK new-car market to a strong first half-year performance. The overall market has risen faster than we were expecting but growth is showing signs of stabilising around our forecast level."
A spokesman for the car finance industry, Paul Brotherton, suggested that access to high-quality car loans for more customers was making the purchase of new and used cars more affordable for more motorists. He said: "We had predicted that the new-car sales market may slow down ahead of the September number plate change, but today's figures are welcome news, if surprising. Buying a new vehicle has become more accessible for both new and more experienced car buyers as carmakers continue to offer keen finance deals that make owning a new car more affordable."
Car manufacturing in the UK is also on the increase, with substantial investment in UK car plants increasing production capacity. According to the SMMT, figures in the UK will soon return to levels not achieved since the heyday of car manufacturing the 1970s. The record of 1.92 million was set in 1972, and last year car production reached a six-year high of 1.51 million vehicles. The SMMT reckons that output could begin to approach that 1972 record within three years.
Many industry observers point out that the continued pressure on household finances is the greatest threat to future car sales rises. Recent wage rises have continued to be below inflation, meaning that in real terms income is falling. The economy has recently begun to grow, however, and many will hope that this is sufficient impetus for a continued growth in car sales.