New car registrations continue to show the industry moving out of recession, with volumes expected to surpass 2.2million units this year, according to a forecast from the Society of Motor Manufacturers and Traders (SMMT).
The latest figures predict growth of more than 8.4% compared with 2012 and industry comment suggests that figure will be surpassed before the end of the year.
NEED TO KNOW
|♦ 12.7% increase in new car registrations in July|
♦ Market forecast now only
8.3% behind pre-recessionary levels in 2007
The improved forecast comes on the back of a strong July that marked the 17th month of growth in the UK new car market, with registrations up 12.7% to 162,228 units.
Private registrations increased by 11.9% to 71,549 units, while business and fleet led the growth, up 12.8% and 21.9% respectively.
Retail growth figures are supported by news that new car dealer finance, up 31% in the first six months of 2013 according to the latest FLA figures, has also managed an 18-month consecutive streak for growth in the UK. Total registrations have exceeded 80% of 2012 full-year volumes and are 11 times higher than 2010.
The market forecast is now just 8.3% behind pre-recessionary levels in 2007, when new car registrations hit 2.4 million units.
Wales posted the biggest growth in July, with new car registrations up 26.59% to 4,945 units. England posted growth of 12.64%, with 122,648 units, Northern Ireland followed with growth of 10.85% to 3,439 units and Scotland was up 10.09% to 12,038 units. Derek McAllan, UK head of automotive retail at KPMG, said: “July was a truly glorious month for the UK.
“While we cannot rely on this tide of positive sentiment to continue throughout the winter, the continued availability of cheap and subsidised finance, a recovering economy and a sustained house price recovery should ensure that the motor retail market remains strong for the remainder of the year and into 2014.”
KPMG is expecting the SMMT to increase its forecast for the year and expects the market to break 2.2m.
The SMMT said the growth reflects increased availability of products across the UK and wider interest from motorists looking to minimise CO2 emissions and take advantage of tax breaks.
Mike Baunton, SMMT interim chief executive, said: “Now we have evidence of consistent growth, we have raised our forecast for 2013 new car registrations.
“Recently, we’ve seen a range of economic indicators point to improving conditions and our raised sales forecast emphasises how positively we view the rest of 2013.”
Mercedes-Benz and Kia openly applauded their dealer networks to help deliver growth in July and YTD. Ford specifically praised its model range, with every nameplate from Ka to Galaxy increasing in sales compared with July 2012. Consumer demand for the Fiesta ST also outstripped the brand’s expectations, with double the expected number of orders since it went on sale in March and almost one third of all orders placed across Europe coming from the UK.
More than 3,000 Fiesta ST orders have been placed in the UK, a rate well ahead of the projected 5,000-per-year target.
Consumer confidence was supported by British Retail Consortium figures that showed high street retail sales up 2.2% during July.
Sue Robinson, director of the National Franchised Dealers Association (NFDA), said: “It is extremely encouraging that new car sales continued to improve in July, with year-to-date growth now at 10.3%.
“Dealers are reporting increased footfall in showrooms as consumers are drawn in by new products and services offered by dealers and manufacturers.
“With such strong manufacturer and finance offers currently available, dealers are reporting that it is proving much easier to close a sale.” Robinson said competitive pricing and strong incentives must continue if the sales trend was to continue throughout 2013.
Ford posted big growth in July with a 38.16% increase in the month, while rival Vauxhall saw a slight increase of 0.92%. VW, Nissan, Peugeot and Toyota all posted growth in the volume sector.
Brands such as Mitsubishi, Fiat, Seat and Mazda recovered in July, posting registration growth of 24.45%, 24.19%, 22.65% and 20.33% respectively. Suzuki also posted impressive growth in July, with volumes up 24.39% to 1,739 units.
Audi led growth for premium brands in July, with registrations up 18.33%, while Mercedes-Benz followed with 15.9% growth.
BMW also saw a double-digit increase, with registrations up 14.9% in July.
Jaguar also stormed ahead in July, with registrations bolstered by models such as the new F-Type, which helped boost volumes by 29.48%. However, Land Rover volumes were static, up 0.67%.
Small franchises such as Perodua continue to tick over in the UK, with just 13 registrations in July, while no Protons were registered in the month.
Chrysler saw a massive drop in volumes in July, with registrations down 59.24% as the Delta and Ypsilon struggle to find buyers in the UK.
SsangYong saw registrations fall 63.1% in July, down to 31 units. Subaru is looking to recover its registrations in the UK and is waiting for its new Forester (reviewed on page 81) to help sales, with July volumes down 33.08%.