UK car dealerships record best April sales for a decade

Car buyers shook off the uncertainty of the general election and helped dealerships up and down the UK to record the best April sales for a decade.

New car registrations rose 5.1 per cent to 186,000 units last month, according to the Society of Motor Manufacturers and Traders (SMMT), leaving year-to-date registrations up 6.4 per cent.

The strong April result means Britain's car market has risen for 38 consecutive months, fuelled by cheap credit, innovative financing packages and strong levels of consumer confidence.

Consumer confidence in the UK is rebounding, with Britons more willing to spend than at any point since 2002, according to an April survey by GfK.

Last month saw retailers ring up the best March sales on record, but the strength of momentum in the UK's car market has surprised even the industry trade body.

Last week, the SMMT revised upwards its forecast for growth in the UK car market this year, from 1.2 per cent, to 3.6 per cent. That would mean annual sales of 2.56m vehicles, within a whisker of the record 2.58m achieved in 2003.

Mike Hawes, SMMT chief executive, said: "Today's figures highlight the current strength of consumer confidence, even at a time of such political uncertainty."

The trade body said that all but three of the past nine general elections had coincided with a sharp rise in new car demand.

The strong UK car sales contrast with a European car market still recovering from a sustained period of decline between 2008 and 2013.

April car sales in the European Union's other big markets showed rising optimism. Sales in Germany, Europe's biggest market, rose more than 6 per cent, while French sales were up 2 per cent. Registrations in Italy increased by about 25 per cent, while sales in Spain rose 3 per cent.

But analysts say the UK market is also being driven by high levels of discounting by dealers.

Tim Urquhart, analyst at IHS Automotive, said: "The forecourts are absolutely stacked and the dealers are under pressure to move the metal. You see that in the crazy deals we're getting. It's everywhere; everyone's doing it.

"All across the major western European markets it's probably harder than it's ever been for the mid-market manufacturers to generate margins. Are they making any money?"

He added that many dealerships were probably only really making money on servicing and repairs.

The strength of the UK market is primarily because of fleet purchases - including company cars - which were up 9 per cent year on year in April, rather than private purchases, which rose less than 3 per cent.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation