UK car market continues to grow in July figures
July registrations figures show that 172,907 new cars were registered in July, according to the SMMT, a rise of 6.6 per cent and the 29th consecutive month of growth. Economic confidence and attractive finance are said to have driven the rejuvenated market up 10.1 per cent year-to-date to 1,460,172 units. As a result of the faster-than-expected first half growth, the SMMT has upped its 2014 market forecast to 2.45 million registrations, up 8.1 per cent on 2013.
Mike Hawes, SMMT chief executive, said: “July saw the new car market extend its record period of growth to a 29th month, as confident consumers took advantage of an array of new products and attractive finance deals on the latest fuel-efficient new cars. The continued positivity has led to an uplift in the SMMT full year forecast to 2.45 million passenger car registrations, a rise of 8.1 per cent. However, the more moderate growth of the last three months shows that overall demand is beginning to stabilise.”
Growth in line with Europe
Responding to the figures, Dr Christian Stadler (associate Professor of Strategic Management and car industry researcher at Warwick Business School) said: “The UK car sales growth is in line with the wider trend in Europe. Germany has also been consistently producing good sales figures in recent years. There are two reasons for this: the economic recovery in the UK and used cars are becoming more expensive because there are less around. During the financial crisis fewer cars were bought which means there are now less used cars around.
“Of Europe’s mass market car producers Volkswagen weathered the crisis best as its strong balance sheet allowed them to offer attractive finance deals and their reputation of reliability matters in hard times. Reducing numbers on the production line is an expensive option, so car manufacturers were prepared to make less of a margin and produce attractive finance deals during the crisis, which are still in place. A strong balance sheet allows companies to do this. Ford, Opel, Peugeot and Renault all have new products in the showroom and might benefit from the upturn now. While Japanese car producers should be watched”.
Car dealers welcome growth news
“It is extremely encouraging that new car sales continued to improve in July with year-to-date growth now at 10.1 per cent” said Sue Robinson, director of the National Franchised Dealers Association (NFDA) which represents franchised car and commercial vehicle retailers across the UK.
Commenting on the SMMT’s new car registration figures Robinson continued: “Dealers are reporting increased footfall in showrooms as consumers are drawn in by new products and services offered by dealers and manufacturers. With such strong manufacturer and finance offers currently available, dealers are reporting that it is proving much easier to close a sale. However competitive pricing and strong incentives remain important if the sales trend is to continue throughout 2014.”