The UK car market turned in a welcome 7.9% year-on-year growth rate in May according to data released by the SMMT.
The car sales figures were boosted by a surge in private retail demand and positive fleet sales. The SMMT hailed the market gain as good news for the UK auto industry and economy.
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The SMMT said that the May results were more than 6% and 9,000 units above SMMT’s forecast for the month.
“May’s 7.9% increase in new car registrations is good news for the motor industry and the UK economy, particularly the steady growth in demand from private buyers,” said Paul Everitt, SMMT Chief Executive.
“There is no doubt that vehicle manufacturers and their dealer networks are working hard to deliver value for money to motorists and the consistent climb in new car registrations during the first five months of the year suggests that confidence is returning, despite financial uncertainty in the eurozone.”
The new car market rose 7.9% or 11,857 units in May to 162,288 units. This was the strongest rate of growth since the scrappage-induced rise in June 2010 and was the third, and largest, monthly increase in a row.
New car registrations over the first five months of 2012 have improved by 2.6% to 868,166 units. This was a 21,653 unit increase over last year, with this growth firmly established in the past three months.
The 12-month running rate stood at 1.963m units in May, almost unchanged from a year ago but some 20,000 units above the 2011 full year figure of 1,941,343 units.
Recent growth in the market has been supported by improved private volumes, which have recovered to post an 8.5% rise over the first five months of 2012, with a 14.3% increase in May. Fleet volumes also picked up in May.
May’s growth figures were also welcomed elsewhere, although the retail side of the industry also expressed some caution on the outlook.
David Raistrick, UK Manufacturing Leader at Deloitte, said: “The increase in new car registrations during May 2012 compared to the same time last year is welcome news for car dealers who have to prepare for a challenging second half of the year. It is important for retailers to make the most of the next couple of months, since major events such as the UEFA Euro 2012 and Olympic Games can lead to a drop in enquires and sales. With some parts of the retail market reporting a squeeze on profit margins, the outlook still appears challenging.
“The increase in fleet sales is a welcome reversal of the downward trend. However, with growing nervousness in the eurozone, businesses will continue to be cautious when reviewing their fleet expenditure. In contrast, growth in vehicle and engine production in the UK is being maintained and is reflected in the highest level of net vehicles exported by the UK since the 1970s.”
Sue Robinson, director of the NFDA, said: “While it is good to see that the new car market grew in May 2012, the consumer sector remains challenging. However, there are many great retail offers available, which are tempting people into showrooms and there is evidence that customers are willing to buy if the offer is right.
“Consumers continue to monitor their spending and are looking at ways to reduce household expenditure. This has resulted in reasonable demand for smaller fuel-efficient and easy to maintain vehicles.”
As new models came to market, the alternatively-fuelled sector grew 31.8% in May (though accounts for a little over 1% of the car market).
New models helped the Mini segment rise 85.8% in May. The Dual Purpose, Lower Medium, Supermini and Specialist Sports segments also recorded improved volumes in the month.
The Vauxhall Corsa was the best-selling model in May (8,413 units sold, second placed Ford Fiesta on 8,337), with Ford’s Fiesta still top over the first five months of 2012 (50,507 units sold).
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