THE UK’s new car market got off to a positive start in January, with registrations climbing 2.9 per cent compared with the same month in 2015 to reach an 11-year high of 169,678 units.
The month’s results were the best recorded since January 2005, which saw 181,474 new cars registered.
Private registrations fuelled new registration growth with an increase of two per cent to 73,061 vehicle – the highest level since 2004.
Private and business buyers are reported to have driven this growth with demand for new cars up by 8.2 per cent to 73,061 and 5.0 per cent to 6,716 units respectively, while the fleet sector declined slightly by 1.1 per cent to 89,901. The month marks the highest number of new cars registered to private buyers in January in 12 years.
Alternatively-fuelled vehicle (AFV) demand also grew in popularity with registrations up by 32.1 per cent on January 2015, to account for a record 3.6 per cent of registrations.
Petrol hybrids showed the largest growth – up 44.1 per cent to 3,783 cars – while plug-in hybrid demand grew 32.3 per cent to 1,592 vehicles and pure electric cars enjoyed an uplift of 14.1 per cent to 584 units. Demand for diesel, which just retained the majority market share, remained stable, up 0.6 per cent, while petrol registrations grew 3.7 per cent.
Mike Hawes, SMMT chief executive, said: ‘January’s solid performance puts the new car sector in a good position to start the year. Providing consumer confidence remains strong, we expect a more stable 12 months ahead, broadly similar to 2015 which was, of course, a record year.’
James Hind, founder of Carwow, added: ‘2015 may have been a record year for new car registration, but I’m predicting that 2016 will see an even bigger lift. The fact that this is the best January since 2005 for the new car market is a good indication that people’s confidence in the market is growing.
‘With petrol hybrids, plug-in hybrids and pure electric cars increasing in popularity, it seems that car buyers are taking a more environmentally-friendly approach to their purchasing decisions. This is a trend that I think will continue as the year progresses, particularly as people become more concerned about being ‘green’, or being seen to be ‘green’.
‘New cars in general are now a more attractive option for buyers than nearly-new used vehicles, due to the availability of better finance deals and the packages that often come with a new car. The used car market is swiftly becoming a less tempting option for people.’
Commenting on the latest figures, Sue Robinson, director of the National Franchised Dealers Association (NFDA) which represents franchised car and commercial vehicle retailers across the UK, said: ‘It is extremely positive to see that the car market in January has continued its upward trend.
‘Consumer confidence continued to grow as the economy becomes more robust, and retail customers feel secure enough to commit to buying cars. This is helped by the competitive offers made available by the manufacturer and a more disposable income due to higher levels of employment.
‘On the back of this we predict that the franchise sector will create 15,000 new jobs in 2016 following all the new and nearly new cars being serviced. We expect the market to continue to perform well and to build on the success of 2015.’
Ian Gilmartin, head of Retail and wholesale at Barclays, added: ‘Last year’s success was driven by growth in fleet sales, so it’s particularly pleasing to see the jump in private buyers during January, as well as a staggering one-third increase in alternatively-fuelled vehicles. Balance in the type of sales will be crucial as 2016 progresses, so to demonstrate strength across the board is very encouraging.
‘All eyes now will be looking forward to the plate change on March 1st. It’s not going to be easy to keep up this level of growth due to the high level of registrations achieved last year, so we may see more moderate and balanced figures in future months, but based on today’s data it looks like the industry is in good shape to replicate recent successes.’
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