The Rise in New Car Registrations Continues
Last month saw yet another new benchmark set for new cars being registered in the UK, outdoing every other January in over a decade in terms of sales.
Figures published by the Society of Motor Manufacturers and Traders (SMMT) found that the first 31 days of 2016 showed no signs that the British car market is slowing down, with a 2.9 per cent year-on-year rise in registrations.
In total, just under 170,000 new cars were sold nationwide, with almost half of this number accounted for by purchases made by private buyers. Meanwhile, the number of business buyers was five per cent higher last month than it was over the course of January 2015, indicating the importance of commercial sales to the ongoing health of the market as a whole.
Conversely, there was a 1.1 per cent decline in demand from the fleet sector, which could offset some of the gains that might otherwise be made in the coming months of the year.
The Ford Fiesta reigned supreme at the top of the new car sales charts last month, outdoing all of its rivals yet again. But there was a shake-up in second place, as the Nissan Qashqai managed to unseat the Vauxhall Corsa and score an important victory for compact SUVs everywhere.
The Qashqai is unlikely to kick the Fiesta off the top spot any time soon, since it sold just over 4000 units last month, while Ford’s family hatchback held on to a significant lead of 8500 registrations nationally.
The growing popularity of alternatively fuelled vehicles (AVFs) continued to be demonstrated in January this year as over 6000 units were registered, which represents an increase of a third compared with the same month last year.
While full electric cars are gaining traction in the market, it is hybrids that are still the king of the AVF niche for the time being thanks to a 44 per cent increase in registrations.
SMMT spokesperson Mike Hawes said that the record-breaking growth in sales that the UK market enjoyed in January this year would be seen as a strong start by those in the industry, indicating that consumers are still confident in the strength of the country’s economy and are thus willing to invest in cars in greater numbers.
Hawes went on to predict that these figures foreshadow a period of stability for the market in 2016, meaning that, as with 2015, it there should be further sales records to set.
This stability is also expected to be seen in the used car market, with the latest survey from CAP indicating that although footfall at dealerships was down last month, the demand for second-hand vehicles is still strong enough to cope with the increasing supply, according to AM Online.
CAP spokesperson Derren Martin said that nearly-new cars would likely be subjected to market forces to a greater degree, meaning that prices could fall as dealers look to make them more attractive than brand new models.
This could also have a knock-on impact on the price of slightly older models, since Martin points out that the effect of price changes elsewhere will be impossible to ignore.
Experts believe that the used market may face bigger problems later in the year, with the stability only likely to last until Easter, at which point it will be possible to get a clearer picture of how the balance between supply and demand will sit for the rest of 2016.
It is a good time for buyers of new and used cars alike in the UK, with affordable finance packages and a significant supply of cost-effective models with subsidies and incentives on offer. Growth cannot be sustained indefinitely, but this will not dissuade people from buying the vehicles that suit their lifestyles and budgets in bigger numbers than have been seen in more than a decade. This year looks as if it will another good one for the automotive industry.