British car market at a boom

Month on month the UK’s car market is showing no signs of slowing down with 172,907 new cars registered in July, a rise of 6.6% on June.

The new car market is celebrating its 29th consecutive month of growth thanks to an increase in economic confidence and favourable finance deals which have driven the market up 10.1% year-to-date to 1,460,172 units.

Mike Hawes, SMMT Chief Executive, commented, “The continued positively has led to an uplift in the SMMT full year forecast to 2.45 million passenger car registrations, a rise of 8.1%. However, the more moderate growth of the last three months shows that overall demand is beginning to stabilise”.

While the seemingly perpetual growth of car sales may come as a pleasant surprise, the list of the most popular vehicles in the UK is less of a surprise, since it correlates with similar statistics from previous months.

Once again for the month of July the smaller cars seem to dominate the market with the Ford Fiesta once again stealing the top position with the best selling model on the market with 8,854 units sold, whilst the Ford Focus sat comfortably in second place with 6,013 units and the Vauxhall Corsa in distant third with 5,467 models sold.

Stats have also shown that in spite of smaller cars topping the charts in terms of raw sales, there are signs of a new buying trend emerging. Over 26,000 electric vehicles have been registered in the UK this year. That is a 50% increase on last year.

Currently electric cars only account for 1.8% per cent of new car sales, not a huge amount, agreed. However if this niche continues to perform at its current rate of expansion then the car industry could be in for a real change, especially when you consider they are cheaper and more practical to run.

The UK car industry has been one of the best-performing sectors in the UK economy since the financial crisis, and is seen as vital to the Government’s efforts to re-balance the economy away from financial services and towards manufacturing.

Future upheavals

With September slowly approaching there will be another glut of new car registrations buoying the market further, however there are still concerns about how the improving economy will impact the used market.

Supply and demand are crucial factors in determining the true value of a used vehicle, so with an increase in new sales occurring month on month there is the worry that this will lead to an over-saturation of the used vehicle sector.

However, as things currently stand demand seems to be keeping pace with the constant rise in new vehicle sales.

More from Creditplus:

A closer look at the five best-selling cars of the year (so far).

Car Finance Facts for June.

Creditplus car review: Vauxhall Corsa.