Buyer confidence seen in 2013’s UK new car sales tally continued into January 2014 as “fuel-efficient motoring” drove “a solid start to 2014 new car registrations”, the Society of Motor Manufacturers and Traders (SMMT) said.
Last month’s sales rose 7.6% year on year to 154,562 new cars registered.
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“Buyers [were] attracted by fuel efficiency; a typical new car is 27% more efficient than a seven year old model,” the lobby group noted.
Alternatively-fuelled vehicle registrations increased 25% over January 2013.
But 2014 is “set for more moderate growth than 2013”.
“The new car market ended 2013 on a high, so it is encouraging to see the January market start the year strongly, rising 7.6%,” said SMMT chief executive Mike Hawes.
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By GlobalData“As fuel economy is a major consideration for many motorists, ongoing investment by vehicle manufacturers in innovative, fuel-efficient technology is a key factor in the growing demand for new cars. Looking ahead, the UK automotive industry expects to see moderate, sustainable growth in 2014.”
Registrations of alternatively-fuelled vehicles (AFVs) outperformed the overall market in January 2014, growing 25% and taking an improved 1.8% share of volumes.
Petrol-electric hybrids accounted for almost all AFV registrations in 2008. Since then, the increased availability of pure electric, plug-in and diesel-electric powertrains has helped the overall AFV market gain more traction.
The new government/industry ‘Go Ultra Low’ campaign to promote the advantages of ultra-low emission vehicles will provide a further stimulus to this important, growing market, the SMMT said.
The Plug-In Car Grant (up to GBP5,000 [US$8,155]) continues to provide an important incentive to buyers of pure electric and plug-in vehicles.
David Raistrick, UK automotive leader at Deloitte said: “The UK new car market has continued the recovery that started some 23 months ago with a positive start to 2014. Indeed, the new registrations for January are the highest recorded since 2008. Although this is too early to draw any significant conclusions, the level of sales will be a cause for optimism that the momentum achieved during 2013 has not been washed away by the particularly wet start to the year.”
He noted: “PPI compensation [following financicl product ‘mis-selling’] has bolstered consumers’ buying power over the past two years; it will be interesting to see if this will continue. Buying new cars through the attractive financial products available at relatively low interest rates has also been a major factor in supporting growth.
“PPI has been a particularly UK-related issue and our European neighbours, at time of economic and financial difficulty, have not seen this type of direct injection of potential funding to the consumer. This has no doubt been a factor in the much slower rate of recovery achieved in the major markets of France, Germany and Italy. The positive movements during December in these three markets in particular may be the indication of a return to growth in the European market place. But this will only be maintained if the levels of consumer confidence across Europe improves, supported by stability in the economic outlook. Until there is seen to be a consistent upward trend, motor manufacturers will continue to focus their efforts on the UK market.”
Phil Harrold, automotive partner, PwC, said: “UK registrations have shown a continuation of the trends of 2013 with further solid growth (albeit at a lower percentage, but that merely reflects the strength of last year’s growth.) Most notable is the 25% rise in alternatively fuelled vehicles, almost all of which are hybrid, which reflects both motorists’ desire for more economical motoring alongside their desire to go green. However, this is from a low base and such vehicles account for just 1.8% of registrations.
“As the SMMT notes, a typical 2014 vehicle is now 27% more efficient than a 2008 vehicle. This not only pays back in reduced fuel costs, but also in vehicle taxes and duties.”
For data tables, click on Press Release
