It has been revealed that car sales in the UK have continued to show signs of acceleration and continued in this vain in September. In fact, last month the British motor industry recorded its best September in ten-years.
There were some 426,000 new cars registered during the month, which was a rise of 5.6 percent year on year and represents the highest September sales since 2004. These sales figures now means that the UK car industry has managed to enjoy an incredible 31 months of consecutive growth.
However, there are many analysts who are predicting that this rapid rise in fortunes for a once beleaguered industry, will taper off as sales amounts reach the pre-crisis levels. This is because despite boasting strong September numbers, the third-quarter growth, which also includes July and August, was 6.2 percent, the slowest three-month period since the second quarter of 2012.
The good news is that the UK car industry still remains on course to hit 2.45million new registrations this year, which would be the best 12-month period since 2004 and only just short of the pre-crisis sales peak of 2.6million in 2003.
Demand in the UK, which has been helped by easy access to credit and a 2009 scrappage scheme that supported brining buyers in to the new-car cycle, has been heralded as one of the few bright spots for global car manufacturers throughout Europe.
Sales across the continent remain 20 percent short of the levels in 2007, but the UK, which is now the second-biggest new car market behind Germany, continues to gather speed compared to its major competitors. Even when taking into account contracting markets, the UK was still able to contribute almost a third of the absolute growth in the new motor sales that were achieved across Europe so far this year to the end of August.
The growth that has largely been fuelled by credit, has been underlined by Volkswagen’s UK financing arm revealing its portfolio of car loans, leasing and insurance, which has increased by 40 percent in two years to reach £10bn.
Head of UK automotive at Deloitte, David Raistrick believes the UK is close to capacity and said of the continued growth in sales, “It is about to come to a gradual stop. That’s not a bad thing, it’s just the reality that the UK market has a finite size, and we’re very nearly at that.”
The month of September has always been one of the most important months for the industry because it sees the release of new registration plates and really tests the appetite of consumers to want to own the latest vehicles being produced by the global manufacturers. The months of September and March, when the first yearly plate changes come in, combine to account for a third of all annual registrations.
Chief executive of the Society of Motor Manufacturers and Traders (SMMT) Mike Hawes was happy that September’s performance was particularly strong given the fact that we saw ‘bumper’ volumes of sales in the same month last year, when they grew by a massive 12.1 percent. He said,
“Demand for the new 64-plate has been boosted by intensifying confidence in the UK economy, with consumers attracted by a wide range of exciting, increasingly fuel-efficient new cars.”
However, Mr Hawes was cautious to add that in the months since March of this year, which saw an 18 percent annual rise in registrations, the growth figures have shown signs of levelling off as the automotive market starts to find its ‘natural running rate’. It has been revealed that registrations for the first nine months of this year have now reached almost 2 million, which is up 9% on the first three quarters of last year, according to the industry body, SMMT.
There was also good news for Ford, Vauxhall and VW, whom together control a third of the UK market and continued to produce the UK’s most popular models. The Ford Fiesta and Focus are number one and two in the sales charts in the year-to-date, with the Vauxhall Corsa sitting in third position. Ford said that it’s commercial vehicle sales for September in the UK were the best ever for a single month and overall Ford vehicle sales figures were approaching 70,000, which is the highest monthly sales total since 2007.
Elsewhere we are seeing electric cars, hybrids and other alternatively-fuelled vehicles (AFVs) increasingly grab their market share from the traditional petrol or diesel models. Statistics from the SMMT showed that 9,955 AFVs were registered in September, which was a 56 percent rise on the same time last year. This increase accounted for a 2.3 percent of the total market, resulting in a 44 percent year on year rise. According to the SMMT, 37,842 AFVs have already been sold during 2014, which equates to a more than 50 percent increase on the same point a year ago and market share has also grown from 1.4 percent in 2013 to 1.9 percent this year.
A spokesman for SMMT believes that the AFV market is benefiting from more models coming onto the market and there are now more than 20 plug-in vehicles available compared to just six in 2011. The spokesman said, “We do expect this trend to continue in the future as a number of models increase. Infrastructure is being well-supported by government at the moment, and as long as that continues there’s no reason why the market for plug-in vehicles shouldn’t grow even more in the coming months and years.”
Of the 9,955 AFVs registered in September, 3,090 were classed as eligible for the government’s plug-in grant, which offers up to £5,000 off the cost of a pure-electric or plug-in hybrid vehicle. There have been 14,274 eligible cars registered since the scheme launched in January 2011.