UK new-car sales up 6%, best September for 10 years

New car registrations reached a 10-year high in September, fuelled by consumer confidence in the UK economy, the Society of Motor Manufacturers and Traders (SMMT) has said.

Sales rose to 425,861 last month, the 31st consecutive month of growth and the best September since 2004.

The Ford Fiesta remains the UK’s best-selling car, with 106,930 models registered in 2014, while the family-friendly Ford Focus is second with 67,015 registrations. Third place goes to the Vauxhall Corsa, with 62,693 registrations.

The market is on track for a total of 2.45 million new-car registrations in 2014, which if reached, would be the highest level recorded since 2004.

Figures are typically strong in March and September when the UK introduces new registration plates, with the SMMT saying the new series was one of several factors to push up figures.

Cheap finance, helped by record-low interest rates, has pushed up car sales since the 2008-09 financial crisis which saw registrations nose-dive and the government intervene to support the industry with a scrappage scheme.

Up to 80 percent of new-car purchases are now made on credit with many customers effectively renting a new car – typically for three years – before trading it in for a new model using a scheme known as a personal contract plan (PCP).

But there are signs the UK’s buoyant car market is beginning to cool with year-on-year sales growing by 18 percent in March, the last time new registration plates were brought in, three times as much as September’s more moderate rate of growth.

Car sales were one of the first areas of UK consumer demand to recover after the economic downturn.

The UK joined other major European markets in reporting a sales rise last month. Registrations in Germany rose 5 percent, while in France they were up 6 percent. In Italy, sales rose 3 percent and in Spain, a government scrappage scheme helped to lift registrations by 26 percent in September.

SMMT chief executive, Mike Hawes, said, “September’s strong performance underlined the continuing robustness of the UK new car market, particularly in the context of last September’s bumper volumes.

“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. In the months since March – which saw an 18 per cent jump in registrations – the growth has shown signs of levelling off as the market starts to find its natural running rate.”