Data released by the SMMT shows that the UK car market hit a new record of almost 2.7m units (2,692,786) sold in 2016, up 2.3% on the previous year.
It was the fifth year of growth for the UK car market, although it is widely expected that from this high point the market will be flat or go into decline during 2017. Some importers are increasing prices in response to sterling depreciation and there are a number of uncertainties ahead for the UK economy (most notably, Brexit negotiations with Brussels start in the spring). December’s market result was 1.1% down on a year earlier, with 178,022 new cars registered in the month.
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Fleets were responsible for most of the growth in 2016, with demand growing to a record 1.38 million units. The private market remains at a historically high level, with more than 1.2 million private buyers registering a new car in 2016, although demand did fall over the latter three quarters. However, private sales were down in 2016, by 5.5%. Neverhless, the SMMT noted that the competitive range of affordable finance is a crucial factor driving private demand as consumers are able to take advantage of low interest rates and flexible payment options.
Diesel share also declined in 2016, at 47% of the market versus 49.8% in 2015. Petrol was correspondingly up to 49.5% (from 46.9%) but alternatively fueled vehicles – mainly electric cars – were just 3.5% of the car market (3.2% in 2015).
Mike Hawes, SMMT Chief Executive, said: “Despite 2016’s political and economic uncertainties, the UK’s new car market delivered another record performance as car makers offered an incredible range of innovative and high tech models. 2017 may well be more challenging as sterling depreciation raises the price of imported goods but, with interest rates still at historic lows and a range of new models arriving in 2017, there are still many reasons for consumers to consider a new car in 2017.
“Looking longer term, the strength of this market will rest on our ability to maintain our current trading relations and, in particular, avoid tariff barriers which could add significantly to the cost of a new car.”
Ford’s Fiesta was the best seller for the year, by a considerable margin.
Top 10 sellers in 2016
Car sales by brand in 2016
