The UK’s new car market surprised analysts as it turned in stronger than expected growth of 3.3% in April, driven by strong demand among private retail buyers.
Data released by the SMMT shows that new car registrations rose 3.3% in April to 142,322 units. This was the third, and largest, increase this year with January-April volumes up 1.4%.
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Retail sales grew 14.8% in April, continuing the sector’s recovery.
The SMMT revised its full year forecast to 1.95m units, which would be a 0.4% gain on 2011. The UK car market is forecast to nudge 2m units in 2013.
“A strong April new car market has raised confidence across the UK motor industry with registrations increasing 3.1%,” said Paul Everitt, SMMT Chief Executive. “We are seeing a steady increase in consumer confidence with growth in private demand, boosted by the arrival of a raft of new products. SMMT has increased its full year forecast to 1.95 million units, putting the market marginally ahead of 2011, indicating a period of relative stability.”
The market over the January-April period rose 1.4% to 705,878 units.
The SMMT said that market appears to be stabilising and during the month the annual running rate surpassed 1.95m units for the first time since October.
While stabilisation of the market and April’s positive growth number are being welcomed in the industry, the SMMT noted that car sales in April were still some 18% below the 2007, pre-recession level (and 15% above the low of 2009).
The Ford Fiesta was the best-selling model in April and over the first four months of 2012.
David Raistrick, UK Manufacturing Leader at Deloitte, expressed surprise over April’s market rise but was cautious on the outlook.
“The fairly significant increase in new car registrations during April 2012, compared to the same time last year, comes as a surprise. This is good news for the industry, particularly in light of last week’s announcement that the UK has fallen back into recession after a 0.2% contraction in UK growth. While this increase in sales, the largest so far this year, could indicate the market is stabilising, retailers remain cautious,” he said.
“With regards to Fleet sales, levels have generally been maintained, but companies are going to be making difficult decisions in the coming months with potentially lower levels of fleet sales being seen in Q3. On the finance side, a range of new financial products are still available for the private buyer, however; providers are becoming much more stringent with their checks and balances to manage risk.”
John Leech, UK head of KPMG’s automotive practice, said that the resurgence in the sale of new cars in Britain is “starting to gather momentum”.
“Most striking is a real strengthening of underlying retail demand which is up almost 15% in April 2012 compared to a year ago.
“Although this is a surprise, it comes on the back of strong February and March sales figures which should give confidence to the industry and the wider economy.”
