Boom in New Car Sales Continues With 29th Consecutive Monthly Rise
The sale of new cars in the UK continues to defy expectations as July saw registrations increase for the 29th consecutive month. This result further extended the longest period of continued growth since records began in 1959.
The sale of new cars in the UK continues to defy expectations as July saw registrations increase for the 29th consecutive month. This result further extended the longest period of continued growth since records began in 1959. The sales figures have caused industry body, the Society of Motor Manufacturers and Traders (SMMT) to raise its 2014 forecast for the sale of new cars for the second time in just a few months. A total of 172,907 new motors were sold during July, which represented a 6.6% increase on the same month last year. This follows a 6.2% rise in June and gives a running total of a 10.1% rise in the year to date.
The total number of new cars registered in 2014 so far is 1,460,172. The results have seen the SMMT increase its forecast for 2014 sales by 8.1%, predicting a total of 2.45 million units. Top of the list was the evergreen Ford Fiesta, which recorded 8,854 sales. Its stable mate, the Ford Focus, won second place with 6,013 sales. Vauxhall’s Corsa came third. A look through the top ten best selling cars in the UK confirms a long term trend towards smaller cars. Gone are the days when large family saloons like the Cortina or Cavalier topped the charts, as motorists increasingly choose more frugal small cars, which also benefit from lower vehicle excise duty bands.
Also making the top ten list is the new MINI, the VW Golf, Vauxhall Astra, Audi A3, VW Polo and Fiat 500. The Nissan Qashqai was the best selling crossover and the Mitsubishi Outlander overtook both the Toyota Prius and Nissan Leaf as the bestselling car eligible for the Government’s plug-in grant system.
According to the SMMT, new car sales are being driven in part by the launch of a plethora of new models. There are now many extremely fuel efficient cars on the market and this, together with the availability of affordable finance deals, can, in some cases, make running a new car cheaper than driving an older model. SMMT chief executive, Mike Hawes, welcomed the news, saying: “July saw the new car market extend its record growth period to 29 months, as confident customers took advantage of an array of new products and attractive finance deals on the latest fuel-efficient new vehicles. However, the more moderate growth of the last three months shows that longer term demand is beginning to stabilise.”
The increase in new car sales is also a boost to the UK car manufacturing sector, as many of the top-selling cars, such as the Astra, MINI and Qashqai, are built in the UK. The industry has also being enjoying something of a renaissance, with manufacturing numbers approaching levels not seen since the heyday of the 1970s. Production has increased by 50% in the last four years and significant new investment in modern plant is making the industry more efficient than ever before. Mike Hawes confirms: “With several manufacturers having started assembly of new models this year and billions of pounds of investment still to reach production fruition, this is an exciting time for the UK automotive sector.”
Car production was up by 3.5% in the first half of 2014 and the SMMT expects 2014 output to surpass the pre-financial crisis peak of 1.6 million cars in 2004 this year. By the end of the decade, the British car industry is expected to surpass the historical record of 1.92 million cars it achieved in 1972. The mood in the industry is bullish and KPMG head of automotive consulting, John Leech, said: “We are on the threshold of a golden era of British car manufacturing. We have firmed up our forecast for UK vehicle production and are now confident of seeing the 2m vehicle barrier broken in 2017.”
The UK car manufacturing industry has been successful in repositioning itself as a leading supplier of premium brands, such as Rolls-Royce, Jaguar Land Rover and Bentley. These cars have sold exceptionally well in emerging markets, helping the industry export some 80% of its production. Volume manufacturers like General Motors and Nissan continue to make key models like the Astra and Qashqai in the UK and this combination is responsible for the continued health of car making in the UK.