New car registrations show two years’ continuous growth

NEW car registrations have seen two years of continuous month-on-month growth; rising 3% in February, in what is traditionally one of the quietest months of the year.

The Society of Motor Manufacturers and Traders said 68,736 vehicles were registered during the month, a move which indicated continuing consumer confidence in the market

Over the past two years, new registrations have risen 17.4% and with the new 14-registration plates coming in this month there are high hopes the trend will continue in March.
 
Mike Hawes, SMMT chief executive, said: “The 3% rise in February new car registrations marks two full years of continuous month-on-month growth; a real endorsement of consumer confidence and the attractiveness of the new car market.

“While February is typically a quieter month ahead of the March registration plate change, we expect the arrival of the new 14-plate and increasing economic confidence to maintain a steady rate of growth.”

Market analysts have welcomed the 24-month growth but have warned the increases may soon show signs of slowing down.

Peter Gallimore, manufacturing partner at Deloitte in Birmingham, said the continued comparative growth in the new car market was not only a further indication that the UK economy was recovering but was also the result of the recovery.

“Falling inflation, combined with the reduction in the unemployed figures, is supporting the success of the new car market.  It is noticeable that across most of the enlarged EU we are now seeing positive sentiment around the new car market. Given the recent concerns expressed for growth in new and emerging markets, this must be a relief for the major manufacturers,” he said.
 
“We are probably getting close to the time when we start to see a slowing in the comparative monthly increases in the UK new car market. Logically they cannot continue at significant levels forever.  This is not necessarily a bad thing, simply a reflection of the market approaching the point at which it stabilises after the major fluctuations over recent years. It will most likely be a gradual process over the next 12 to 15 months.”
 
Richard Lowe, Head of Retail & Wholesale at Barclays, said: “Falling inflation, the strong housing market and possible wage increases are fuelling consumer confidence and helping to drive new car sales. We’ve seen growth every month for two years, and March’s all-important plate change is sure to keep demand accelerating, before the market starts to level out.”

Neil Barratt, Finance Director of Arbury Motor Group added: “The UK market has been fuelled by low interest rates and the improved strength of the £ against the Euro. The flat car market in the rest of Europe has pushed manufacturers to focus on the buoyant UK market. Customers have therefore benefitted from some much improved consumer offers. Most encouraging is the continued growth in the retail market which is further evidence of improved confidence in the economy.”

The manufacturers themselves saw mixed fortunes.
Jaguar Land Rover endured a quiet month with sales of both marques down compared with the same month last year. Jaguar registering 231 cars, a decline of 13% on 2013 and Land Rover 727 vehicles, a drop of 34%.

They were not alone. BMW was down 7.3%, although Audi (41%) and Mercedes Benz (7.6%) both saw increases in the number of their vehicles registered.

In the luxury sector, Aston Martin – possibly suffering a backlash from its embarrassing global recall – saw registrations dip 55% with eight sales against 18 in February last year. The Gaydon manufacturer’s plight was made worse by Bentley seeing a near 100% increase in its registrations, while Porsche was up over 30%.

Ford retained its leading market share although its sales dipped, largely due to its previously rock-solid Focus slipping down the best seller list, overtaken by both the Vauxhall Corsa and Astra. The strong performance saw Vauxhall rise over 4%, cementing second place in the market share.

Mention should also go to MG. The Longbridge firm has been busy expanding its dealer network and aggressively marketing its models – especially its MG3 supermini. This has benefited the brand with a 422% increase in registrations, although the numbers are still tiny. In February 47 cars were registered, as against nine in the corresponding month last year.