New car registrations in 2013 were the highest for six years as the UK consolidates its position as the second largest car market in Europe.
Figures from the Society of Motor Manufacturers and Traders show there were 2,264,737 cars registered in 2013, up 10.8% on 2012 and exceeding its 2.25 million forecast for the year.
Fleet and business sales took a 52.5% share of registrations, two percentage points lower than in 2012, although the totals for both sectors were up by 5.7% and 18% rspectively, while private registrations were up by more than 15%.
The SMMT said improving consumer and business confidence, after an extended hold-off period and a competitive market place helped fuel sales growth.
Data to November shows the UK market up 9.9%, or over 190,000 units. The EU27 market as whole was down 2.7% or more than 300,000 units.
The Spanish market, supported by its own scrappage scheme, saw volumes rise 2.1% in 2013, while the German, French and Italian markets all fell
"With its best year since a pre-recession 2007, the UK new car market has helped stimulate the country's economic recovery,” said Mike Hawes, SMMT chief executive.
"While the European market is only now showing signs of improvement, the UK has consistently outperformed the rest of Europe with 22 consecutive months of growth.
"The 10.8% increase in 2013 reflects the attractive financial offers available, as well as increased demand for more technologically advanced new cars. We expect new car registrations to remain stable in 2014 as customers return to a more regular replacement cycle."
Welcoming the strong growth in new vehicle registrations, BVRLA Chief Executive Gerry Keaney said: “Fleet and business sales were responsible for more than 50% of new car registrations, which demonstrates the vital role road transport plays in driving the UK economy.”
However, David Raistrick, UK automotive leader at Deloitte, asks whether the UK success story can continue?
“The likely answer is yes," he says, "but not at the rate of growth achieved over the past 12 months.
"With new car sales up by over 10% on 2012, it would not be realistic to expect similar levels to be repeated in the next year.
"There are a number of reasons for this. Most obvious is that the markets in continental Europe are starting to show some improvement. This will potentially lead to a reduction in the number of vehicles being directed into the UK new car market, as the European sectors start to pick up some of the slack.
“While there is an improvement in European markets, they are unlikely to return to their pre-2013 levels in 2014, with the recovery expected to be more gradual over the next 24 – 36 months.
"The UK has also benefitted from more incentives and low finance deals being offered to new car purchasers than in many other European locations. This is likely to continue into 2014 and may result in there being a balancing of car prices over the next 12 months as supply and demand become more aligned in the UK.
“There are always winners and losers at times of economic difficulty and the UK car market has definitely outperformed all expectations over the past year.
"There are likely to be pressures building within the wider UK car market with increasing used car stocks becoming available. This could become a challenge as customers weigh up the monthly cost differential between purchasing a new car as against a nearly new vehicle.
"The expectation that new car finance rates will remain low in relative terms, which is partially due to manufacturer support, will continue to provide significant competition to the wider used car market.
“With this in mind, 2014 may see a slight downward movement in residual values as the market adjusts to a greater volume of nearly new car stock.
"Finally, it is difficult to forecast with any certainty where 2014 will end but the Deloitte automotive team’s analysis is for car sales to remain firmly over 2 million, and probably in excess of 2.2 million, though definitely below 2.4 million.”
Top 10 registrations for 2013
- Ford Fiesta 121,929
- Ford Focus 87,350
- Vauxhall Corsa 84,275
- Vauxhall Astra 68,070
- Volkswagen Golf 64,951
- Nissan Qashqai 50,211
- BMW 3 Series 43,494
- Volkswagen Polo 42,609
- BMW 1 Series 41,883
- Peugeot 208 38,616