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The strongest April market since 2008

UK new car registrations increased year-on-year by 14.8% in April to 163,357 units with the best performance for the month since 2008.

According to the latest statistics from the Society of Motor Manufacturers and Traders (SMMT), April secured the strongest growth in 14 months as buying cycles and market volatility combined to boost uptake.

It continues the growth seen in Q1 this year which led to the SMMT revising up its full year market forecast to 2.106 million units – a 3% increase on 2012.

This figure is still 300,000 units off the pre-recession market. Further growth to 2.123m units is expected in 2014.

Some of the business initiated in March’s plate-change campaign is thought to have spilled over into April due to high demand for certain models and the early Easter break.

Private registrations were 32.3% ahead of April 2012, equating to almost 20,000 more units.

There were 1,098 additional units registered in the month to the fleet and business markets.

Mike Baunton, SMMT interim chief executive, said: “The UK new car market continues to perform surprisingly strongly, with volumes again increasing in April.

“While the headline increase was up almost 15% there were more sales days this year than last.

“The UK continues to perform well ahead of the troubled Eurozone as consumer confidence, regular purchase cycles, attractive finance deals and wider market factors continue to make new car buying favourable for motorists.”

The mini segment continues to post the best growth, while the supermini segment remains the largest for registrations.

Only the upper medium failed to grow during April and the year-to-date.

The Ford Fiesta was again the best-selling model in April, outperforming the second-placed Vauxhall Corsa by almost 2,000 units.

It continues to lead the market this year, with Ford also securing the number two spot so far with its Focus range.

Sue Robinson, director of the National Franchised Dealers Association (NFDA), said: “It is encouraging that new car sales increased in April with private registrations continuing to improve.

“Dealers are reporting demand for smaller vehicles that offer better fuel economy and cheaper maintenance.

“This, along with the new products and services offered by dealers
and manufacturers, is encouraging people to buy.”

“Consumer confidence is still fragile, therefore competitive pricing and strong incentives remain important in convincing customers to buy.”

Examination of the 10 most popular new cars in the UK to date reinforces Robinson’s views on demand for smaller cars.

Six of the 10 are in the B-segment, and these alone account for 17% or 127,945 of the 768,555 total registrations of the first four months of 2013.

An improving market share for petrol-powered cars may be further evidence of this demand, as it makes less sense to private motorists covering modest annual mileage to pay a premium for diesel power.

David Raistrick, UK manufacturing leader for Deloitte, said the UK remains a ray of light in a gloomy European market, adding: “As the European retail market struggles to reduce its contraction below double digits, the UK market continues to defy the expectation that a similar level of decline might be experienced here.

Indeed, were it not for the growth in UK sales, the European decline would be closer to 14% for the first quarter of the year.

“It will be a couple of weeks before we can compare the like-for-like performance of the UK market this month with our European neighbours.

However, the first quarter provides a startling level of perspective. In the first three months of the year the UK has closed the gap with Germany, from 210,000 cars to March 2012 to just 68,000 in 2013.

“The UK is now the second largest market for new car sales in Europe, with sales 39% ahead of France and 70% ahead of Italy.

It will be natural for OEMs to be looking closely on the UK market over the coming months.”

Mike Allen, Panmure Gordon executive director equity research, support services, said he believes the ongoing demand weakness across the Eurozone is a larger factor behind putting stock in the UK market at present.

“Our overall sense is that the PLC dealer groups are continuing to trade well, and should report decent H1 results against the current market backdrop.

“We also continue to see robust trends in the used car market from a volume and pricing perspective, and anticipate margins in this part of the market to be heading in the right direction as well,” he added.


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