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New car market hits almost half a million mark in March 2015

Nearly half a million new cars were registered in the UK during the crucial March 2015 plate-change month.

The March new car market was 6% ahead of March 2014, according to data from the Society of Motor Manufacturers and Traders, which said it is the best monthly performance since the twice-yearly number plate changes were introduced.

The month's growth was driven by the fleet sector, which grew by 11.6% to 219,153 cars, while the private market rose by 2.7% to 253,043 units. Business registrations fell by 6.6% to 20,578 units.

The SMMT said the 37th month of consecutive growth in the UK's new car market shows the continuing demand for new products and new fuel-efficient advanced technologies, and growth in fleet reflects the economic confidence currently felt by UK companies.

It said the strong UK market  has helped bolster the economy and drive it out of recession. This growth, supported by domestic manufacturing, has attracted more than £14 billion of investment since 2011, creating almost 30,000 additional jobs. 

Mike Hawes, SMMT chief executive, said: “The best month this century for new car registrations is a welcome boost for the UK’s thriving automotive sector.

"The challenge for a new government and industry will be to maintain this momentum and to strengthen Britain’s manufacturing capabilities through continued investment, innovation and policies which maintain our global competitiveness. Whatever the general election result, the new government must keep up the commitment to the sector which is delivering at home and abroad.”

"We do think there was an element of self-registration that took place here, with the fleet market also driving most of the growth," said Zeus Capital  Research.

"That said, we think the trading backdrop for the dealer groups remains positive, which could lead to some upgrade potential in our forecasts as we progress through the year. We believe UK dealers remain attractively priced, and therefore maintain a positive stance across the sector. 

Industry leaders we have spoken to were broadly happy with the current trading backdrop, but as ever pre-registrations did contribute to this performance in our view.

Within the mix, private registrations were +2.7% versus +11.6% in fleet and business -6.6%. Brand performances of note include Land Rover +29%, Mercedes +18%, Lexus +14% and Hyundai at +10%. 

"Honda continues to struggle and was -8%, while Ford also underperformed the market at +1% with Vauxhall -3%. We believe some of the German manufacturers gained market share in the fleet market via competitive financing offers. 

"We believe this data confirms our thesis that we are in a volume orientated mid cycle market at present. 

"We would anticipate the strength in Land Rover to be particularly helpful for all of the UK orientated dealer groups at present and some margin pressure in new and used car vehicles, with anecdotal evidence suggesting manufacturer volume targets remain demanding. 

"That said, we believe forecast risk across the sector is firmly on the upside at present. The sector valuation of the UK dealer groups also continues to look undemanding in our view."

Chris Sutton, Black Horse managing director, said: “Whilst March car sales are usually the busiest selling month of the year, this year’s 2015 plate change has set a new record high since the twice yearly number plate change was introduced in 1999. 

"It is good to see that this boost has come from businesses taking on new fleets and upgrading company cars demonstrating strong business confidence.
"The industry has for a while been suggesting that demand will ease for new cars, but based on current data it is hard to predict when this growth will slow down.

"Certainly the continued low interest rate environment coupled with attractive and affordable car finance deals continue to play a strong role in maintaining growth in this part of the UK economy."

Sue Robinson, director of the National Franchised Dealers Association, said: “Consumers confidence has been rising as a result of a recovering economy. Fewer concerns about unemployment and the improvements of household finance due to record low inflation and pay rises all help to encourage consumers to buy new cars.

"Finance offers such as PCP and service plans are helping to fix and in some cases cut the cost of motoring for drivers.   

“The fleet market growth in 2015 is pushed by an improved business confidence. We anticipate the market to continue to grow.”

Click here for the full SMMT March registrations data.

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