New car registrations up 14% in October as sales exceed 2m for first time since 2007

NEW car registrations in the UK jumped 14.2% in October to 179,714 units, marking the 32nd consecutive month of growth.

The performance means 2,137,910 cars have been registered in the year-to-date – the first time the market has passed two million in October since 2007.

The Society of Motor Manufacturers and Traders said the October performance exceeded expectations but it reiterated its prediction that demand for new cars was set to stabilise in the coming months.

Rising demand for alternatively-fuelled vehicles continues, with the market up more than 50% for both October and the year-to-date.

Mike Hawes, SMMT Chief Executive, said: “The October new car market outperformed expectations, with registrations showing the strongest growth in a month since March’s 18% rise. With economic confidence still rising, customers continue to benefit from attractive financial packages on exciting new models.

“We still expect the overall market to level off as we head towards 2015, but the exception to that rule will be alternatively-fuelled vehicles, demand for which will continue to accelerate.”

Commenting on the performance, Peter Gallimore, Partner and Automotive Lead at Deloitte in the Midlands, said: “It is now 32 consecutive months of comparative growth which have been achieved in the UK’s new car market and whilst the percentage growth being achieved each month is not quite what it was this time last year, the fact is that more cars are being sold on a regular month by month basis with the total sales for the 10 months of 2014 already being in excess of the full year sales achieved in the years 2008 to 2012.”

He said the market had continued to benefit from the PPI compensation bubble and while that windfall would eventually end, the economic recovery may help to maintain impetus among buyers.

However, he said it was difficult to see the market rising above its current levels.

“It will, however, be interesting to see how the recently announced pension changes will impact on the market, as individuals will have access from April next year to their pension pot value rather than receiving the managed monthly amount through an annuity.  Notwithstanding this, however, our market analysis suggests that the UK car market is unlikely to be able to continue rising beyond current levels,” he added.

There was also better news on the Commercial Vehicle front with demand growing 27% in October to 35,027 units, driving the market up 14.1% to surpass 300,000 units.

Truck registrations saw a sharp upturn of 65.7% to 8,457 units, marking the first month of growth for the market in 2014. Year-to-date levels remain down 9.2%.
The van market continued its strong performance, up 18.2% in October to 26,570 units, and up 18.1% for the year-to-date.

In the new car sector, German manufacturers Audi and BMW showed strong growth last month – up respectively by 20.2% and 24.3%. However, their performance was matched by Jaguar, which saw a near 20% increase in sales of its cars.

Land Rover fared slightly worse, seeing its sales slide almost 7% for the month, although its sales for the year to date remain almost 3% ahead of last year.

In the volume market, Ford maintained its leading market share with Vauxhall trailing in second place.