February 2016 was a terrific month for the UK motor trade, with an astonishing 8.4 percent growth in sales compared with the figure a year earlier. Consumer confidence has definitely returned after the Volkswagen (VW) emissions scandal of late 2015, with sales showing no sign of slowing down – indeed, the UK car market has been growing well for almost four years now, partly driven by competitive forecourt deals, and also by low interest rates.
Sales of the affected VW brand remain strong, with the Golf trailing to only the perennially top-selling Ford Fiesta in monthly figures. The government’s recent commitment to investing in alternative energy vehicles has also started to have an impact with 2.7% of new vehicle registrations belonging to hybrids and electric cars, a rise of 0.3% from the previous February. Sales of petrol and diesel models were also well up on last year’s figures, with marginally more growth in the sales of petrol-engine cars.
According to figures published by the Society of Motor Manufacturers and Traders (SMMT), over 83,000 new cars were sold in February, traditionally a quiet month as consumers wait for the new registration plate in March; the SMMT noted that the February sales figures were the highest in a decade, and the fourth highest since 2000. This continues an impressive trend, with more than 2.6 million new registrations recorded in 2015; while the general UK economy has been sluggish, with falling sales in many areas, the motor industry has continued to show excellent growth. Part of the reason is due to the strong pound driving excellent sales and investment from overseas companies; a major contributor to the sales rise appears also to be the general public. Sales to the public rose more than 22% in February, though there was a small fall of 1.4% in fleet sales.
It’s unclear whether the recent peak in sterling values will see the market begin to slow again, but with rises in car sales almost every month for four years, industry analysts are finding it increasingly difficult to predict when sales of new and used cars will eventually slow down; figures for March will be interesting to see as car showrooms and dealerships roll out new models on trade plates and compete for their market share. Low fuel prices are helping contribute to a strong period for motoring, despite a rise in insurance policy premiums over the last 12 months.