SMMT says new car sales jumped 10.8% in 2013 – fuelled by growing confidence, cheap finance deals and PPI payments
UK car sales soared to their highest level since 2007 last year, fuelled by growing consumer confidence, cheap finance deals and PPI compensation payments.
The number of new cars sold jumped 10.8% to 2.26m, the highest level since the financial crisis took hold, according to the figures from the Society of Motor Manufacturers and Traders, and equivalent to 600 more cars sold a day in 2013 compared with 2012.
Prime minister David Cameron highlighted the rise on Twitter as an example of the growing UK economy. "5 key measures of manufacturing at all-time high & UK car sales top pre-2007 levels. See how we're growing UK economy," he tweeted.
British demand has consistently outperformed the rest of Europe where car sales have been declining. Spain was the only other major market to register a growth in sales last year, with volumes up 2.1%, driven by the country's scrappage scheme. The German, French and Italian markets all shrank as the eurozone's financial crisis continued to take its toll.
The UK has now overtaken France as Europe's second largest car market behind Germany, having enjoyed 22 consecutive months of growth. Sales rose 23.8% to 152,918 in December alone.
Mike Hawes, the SMMT's chief executive, said the car market had been "a bright spot" in the UK economy, with a number of factors driving growth, including the availability of cheap finance deals which account for around 75% of new car sales.
A breakdown of the figures showed the strongest growth in 2013 was in private car sales, up 19.8% as consumers were feeling more confident against a backdrop of economic growth and falling unemployment, and encouraged by attractive promotions.
The Ford Fiesta was the best-selling new car in the UK last year, followed by the Ford Focus, Vauxhall Corsa, Vauxhall Astra and Volkswagen Golf.
The SMMT said British buying patterns were shifting towards smaller, more fuel efficient models, with "supermini" vehicles taking the largest market share of 35.9% in 2013. Registrations of hybrid and plug-in cars rose 20.5% to 32,715 units.
Hawes said that while it was difficult to measure the precise impact of PPI compensation payments on the car industry, average payouts of around £3,000 were clearly having an impact. "It's enough to put a deposit down on a car," he said.
The pace of growth in 2013 is not expected to be repeated however, with the SMMT forecasting a more modest 1% rise in new car sales in 2014, as the rebound in demand from the lows during the recession fades.
"We expect new car registrations to remain stable in 2014 as customers return to a more regular replacement cycle," he said.
Separate figures published by the SMMT at the end of January are expected to show UK car manufacturing also rose in 2013, to around 1.5m vehicles from 1.46m in 2012.
Hawes said growth in UK car manufacturing would be sustained for at least two to three years as a result of the investment already pledged by companies including Jaguar Land Rover and Bentley.
British car manufacturing is expected to surpass its previous 1972 peak of 1.92m vehicles in 2017, Hawes said.
Howard Archer, chief UK economist at IHS Global Insight: "The motor industry will be hoping that the recent improvement in UK economic activity is sustained and extended, and that this underpins consumer and business confidence, and their willingness to splash out on new cars."
Hawes said Britain's continued membership of the European Union would be vital to future investment in the UK car industry. "We need a strong voice to shape regulation in Europe," he added. Reported by guardian.co.uk 11 hours ago.
UK car sales soared to their highest level since 2007 last year, fuelled by growing consumer confidence, cheap finance deals and PPI compensation payments.
The number of new cars sold jumped 10.8% to 2.26m, the highest level since the financial crisis took hold, according to the figures from the Society of Motor Manufacturers and Traders, and equivalent to 600 more cars sold a day in 2013 compared with 2012.
Prime minister David Cameron highlighted the rise on Twitter as an example of the growing UK economy. "5 key measures of manufacturing at all-time high & UK car sales top pre-2007 levels. See how we're growing UK economy," he tweeted.
British demand has consistently outperformed the rest of Europe where car sales have been declining. Spain was the only other major market to register a growth in sales last year, with volumes up 2.1%, driven by the country's scrappage scheme. The German, French and Italian markets all shrank as the eurozone's financial crisis continued to take its toll.
The UK has now overtaken France as Europe's second largest car market behind Germany, having enjoyed 22 consecutive months of growth. Sales rose 23.8% to 152,918 in December alone.
Mike Hawes, the SMMT's chief executive, said the car market had been "a bright spot" in the UK economy, with a number of factors driving growth, including the availability of cheap finance deals which account for around 75% of new car sales.
A breakdown of the figures showed the strongest growth in 2013 was in private car sales, up 19.8% as consumers were feeling more confident against a backdrop of economic growth and falling unemployment, and encouraged by attractive promotions.
The Ford Fiesta was the best-selling new car in the UK last year, followed by the Ford Focus, Vauxhall Corsa, Vauxhall Astra and Volkswagen Golf.
The SMMT said British buying patterns were shifting towards smaller, more fuel efficient models, with "supermini" vehicles taking the largest market share of 35.9% in 2013. Registrations of hybrid and plug-in cars rose 20.5% to 32,715 units.
Hawes said that while it was difficult to measure the precise impact of PPI compensation payments on the car industry, average payouts of around £3,000 were clearly having an impact. "It's enough to put a deposit down on a car," he said.
The pace of growth in 2013 is not expected to be repeated however, with the SMMT forecasting a more modest 1% rise in new car sales in 2014, as the rebound in demand from the lows during the recession fades.
"We expect new car registrations to remain stable in 2014 as customers return to a more regular replacement cycle," he said.
Separate figures published by the SMMT at the end of January are expected to show UK car manufacturing also rose in 2013, to around 1.5m vehicles from 1.46m in 2012.
Hawes said growth in UK car manufacturing would be sustained for at least two to three years as a result of the investment already pledged by companies including Jaguar Land Rover and Bentley.
British car manufacturing is expected to surpass its previous 1972 peak of 1.92m vehicles in 2017, Hawes said.
Howard Archer, chief UK economist at IHS Global Insight: "The motor industry will be hoping that the recent improvement in UK economic activity is sustained and extended, and that this underpins consumer and business confidence, and their willingness to splash out on new cars."
Hawes said Britain's continued membership of the European Union would be vital to future investment in the UK car industry. "We need a strong voice to shape regulation in Europe," he added. Reported by guardian.co.uk 11 hours ago.