The UK car market posted an unexpectedly strong result for June with new car registrations up 10.8% over last year. However, the SMMT warned that the industry faces challenging conditions in the coming months.

SMMT figures show that first half car sales were up 19.9% on the same period last year.

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“The new car market continued to perform above expectations in June, with fleet sector registrations up 25% compared to this time last year.  The results indicate improved business confidence and a strengthening economic recovery,” said Paul Everitt, SMMT chief executive.

“The industry still expects challenging economic conditions in the second half of the year and government action to improve access to credit for consumers and businesses will be important in sustaining the momentum of recovery.”
 
The June car market gain was the 12th successive monthly increase, despite just 0.7% of registrations coming from the scrappage scheme, compared with 19.2% during the same period last year. This June was 16% above the level forecast by SMMT in April, but was 8.5% off the 1999-2009 average.

The fleet market rebounded in June, up 25.3% on the volume recorded a year earlier, whilst business volumes rose by 18.4%. Private demand was almost unchanged, down 3.3%. Over the first half of the year private demand has shown the largest rise, up 24.6%, boosted by the scrappage scheme. The scheme closed to new orders in March.
 
Alternatively fuelled vehicle (AFV) registrations matched their largest ever market share, at 1.2% in June. AFV volumes rose by 157.4% in the month and have grown by over 150% in four of the past six months.

The Vauxhall Astra was the best selling model in June, its first number one slot since February 2008. Ford’s Fiesta had the highest registrations over the first half of 2010.

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See also: UK: Car market decline expected in second half

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