SMMT revises full year forecast upwards

The new car market was up 11.5% to 143,643 units in January compared to the previous year, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT).

New car registrations in the fleet and business sectors were up more than 8% to 82,568 units from 76,160 units at the start of last year.

Fleet and business registrations accounted for 57% of the overall market, compared to 59% in January 2012.

"The new car market has started the year confidently," said Mike Baunton, interim chief executive of SMMT.

"Lifted by a solid rise in private demand, the new car market posted its eleventh successive month of growth with motorists attracted to forecourts by the latest models and competitive deals on offer.

“Building on a strong performance in 2012, SMMT has increased its market forecast. We anticipate a modest rise over the year, followed by further growth in 2014."

It expects the market to rise by 0.6% to 2.057 million units in 2013 and by 2.6% to 2.11 million units in 2014.

Richard Lowe, head of retail and wholesale at Barclays, said: “The UK’s love affair with new cars continues into 2013.

“Despite the snowy forecourts, consumers demand ensured that sales rose for the eleventh month running, and with new model launches and attractive finance deals, we expect to see at least two million cars sold this year.”

The SMMT suggests that cost-conscious and environmentally-minded motorists were attracted to the advances in fuel efficiency across all ranges and new alternative propulsion systems that became available during the last 12 months.

These include diesel-electric hybrids, plug-in hybrids and extended-range electric vehicles. However, registrations of all fuel types rose in January.

Petrol cars saw their market share rise, in line with increased volumes by private buyers and of smaller cars, both of which tend towards petrol cars.

Meanwhile, most segments recorded growth in January, with the Mini, Dual Purpose, Lower Medium and MPV segments posting double digit gains, largely on the back of new model activity over the past 12 months. The Ford Fiesta was the best-selling model in January.

“The new car market continues to perform well despite wider economic uncertainty” said Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA).

“Although the NFDA don’t expect to see major growth in the UK new car market during 2013 we do expect it to be stable.

“We expect the market to be supported by strong manufacturer deals and offers that will encourage consumers to buy.

“We also anticipate some pent up demand from consumers who have put off buying a new car due to economic conditions, but can no longer delay as their car ages with consequent effect on repair and maintenance costs.

“Many of these customers will look to buy a well-priced, smaller vehicle that is cheap to maintain and run.”