The UK car market grew 9.3% to just under 2.5m units in 2014, reaching a 10-year high, according to data released by the SMMT today.

The growth in UK car sales last year to such a high level contrasts with still depleted markets elsewhere in Europe.

Industry participants have told just-auto that competitive conditions in the UK have been extremely tough for some time now, with manufacturers in Europe pushing output to Britain as continental car demand has stalled.

Last year’s car market was also the fourth-largest UK car market of all time (only 2002, 2003 and 2004 saw more cars registered). It also leaves the UK as the second-largest national car market in the EU (Germany at 3m units last year, was the biggest).

Mike Hawes, SMMT Chief Executive, said: “UK new car registrations returned to pre-recession levels in 2014, as pent-up demand from the recession years combined with confidence in the economy saw consumer demand for the latest models grow consistently and strongly.”

Hawes also highlighted growth in alternatively-fuelled vehicles. “”The year was particularly strong for alternatively-fuelled vehicles as increased choice, coupled with a growing desire for reduced costs and greater efficiency, resulted in a quadrupling of plug-in car registrations over 2013,” he said.

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“With a variety of new plug-in models expected in 2015, this area of the market will continue to grow significantly.”

However, he said that the UK car market is expected to stabilise in 2015. ” For the market as a whole, we expect a more stable 2015 as demand levels off,” he said.

David Raistrick, UK Automotive Leader at consultants Deloitte emphasised that the UK car market’s growth and immediate prospects needs to be seen in historical context.

“There is naturally going to come a time when the UK new car market’s record run of comparative monthly growth will come to an end,” he said. “However, when this point comes, and our analysis suggests it will be 2015 with a plateau having now been reached, it is important that the market reaction is measured. A levelling off in new registrations should be balanced against the reality that as recently as only three years ago, new cars sales were less than 1.95 million, and the European market has been in free fall over this period. Equally, there is a finite limit to the numbers of new cars required every year, no matter how buoyant the markets may be. Current levels are hugely positive, and flat sales this coming year, or even a slight reduction, should still be seen as a positive position, and not a tale of woe.”

He also said that a number of positive signs remain for the UK’s car market. “There is no immediate indication that finance costs will increase, with the possibility of an interest rate rise receding as inflation remains below the Bank of England’s target. Higher levels of employment should give more private buyers the confidence to make a purchase. Finally, the continuing troubles in the eurozone will encourage manufacturers to support the UK’s buoyant market.”  

See also: COMMENT: UK car market set to plateau 

Full-year UK car sales by brand

Source SMMT

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