UK car sector rises to 66-month high fuelled by strong demand
DEMAND for new 63-plate registered vehicles has pushed up demand in the UK car sector by more than 12% – a 66-month high, latest figures show.
Figures released by the Society of Motor Manufacturers and Traders show registrations in September were up 12.1% compare3d to the same month last year. In total, 403,136 vehicles were registered during the month, all bearing the 63-plate.
The performance means September was the single best performing month since March 2008 – pre-credit crunch.
For the year to date, private registrations have risen 16.7% compared with 2012, contributing to an overall market rise of 10.8%.
The demand saw companies such as Jaguar Land Rover achieve record monthly sales and encouragingly for the UK industry, more than one in seven of new cars is UK-built.
Mike Hawes, SMMT Chief Executive, said: “The September new car registrations figure was the highest monthly total since March 2008. With over 400,000 new cars registered for the first time in more than five years, the UK market is reflecting growing economic confidence.
“Robust private demand has played a major role in this growth with customers attracted by exciting, increasingly fuel-efficient new models that offer savings in the cost of ownership. This is the 19th consecutive month of steady growth and, with fleet and business demand still to reach pre-recession levels, we believe the performance to be sustainable. The latest 63-plate should deliver positive results into next year.”
Peter Gallimore, partner at Deloitte in Birmingham, said: “September is generally the second busiest month of the year for UK car dealers; however, figures released indicate the best monthly sales in five years. This continues the impressive run of comparative growth, which, in addition to indications that Europe may be turning the corner, will be comforting news for manufacturers.
“Positive news from France, Italy and Spain, reporting growth for September of 3.4%, 2.9% and 29% respectively, is as welcome in Europe as it is in the UK where there remains the threat that residual values may be undermined as more product is directed into the UK marketplace.”
Looking at what is changing in the major European car markets, he said it was noticeable that outside of the UK, growth was not being achieved evenly across the various manufacturers. Indeed, he said the growth in the French market is largely down to the contribution of five brands while competitors have seen double digit levels of contraction.
“Indications point to the manufacturers focused on the middle market offerings not seeing their fortunes turning around as quickly as those brands with aspirational or price driven products.
“It is also worth noting that the Spanish recovery has been very much influenced by government intervention as the provision of subsidies has encouraged the consumer back into the showroom. However, we are well aware that these kinds of market stimulus have a limited existence at which point a stable economic environment is required to maintain any momentum they may provide.”
He added that three quarters of the way through the year, the UK market was now firmly established as the second largest in Europe with only Germany reporting greater levels of new car sales.
The contraction in Germany’s market may be lessening, but this raised interesting questions as to what will happen next in the UK, he added.
“It is a market that many have viewed as defying gravity over the last 12 months, and suggested cannot continue to do so indefinitely – it may however be that the UK has found a new level for sustainable new car sales on a longer term basis.”