New car sales in the United Kingdom hit a high of a decade in 2014 as confidence in the economy once again saw consumers willing to spend. According to the Society of Motor Manufacturers and Traders (SMMT) 2.47 million new cars were registered in 2014 which is an increase of 9% from 2013 and the best performance seen in the sector since 2004.
Sales rose month on month last year peaking in December which was the 34th consecutive monthly rise which the SMMT postulated was because of pent up demand that occurred during the recession years the country experienced.
It was sales of electric cars saw the biggest growth last year, with sales quadrupling to 14,498 from 3,586 in 2013 and with further ‘plug-in’ models due to be launched in 2015, this area is expected to continue to grow significantly throughout this year although overall demand is expected to level off to a more consistent rate.
With wages growing, consumers obviously feel more comfortable in buying big ticket purchases. Another contributing factor to this growth could be that, with the pound strong and the new car market in Europe soft, car makers and manufacturers have been making a concerted effort to push their products on the UK market with Ford seemingly winning this battle as its Fiesta and Focus models were the most popular in the country of the last year.
New credit and financing packages also make purchasing options more attractive with Personal Contract Purchase schemes (PCP) soaring in popularity in recent years with Ford dealers saying they saw 94% of their cars bought in 2014 on a PCP. This is where a customer provides a minimal deposit and then pays a monthly fee for a set period of time until they can either buy the car outright or return it to the dealership and use it towards another PCP deal on a newer model.
As the UK car industry grows, it is used as a good measure of the general public’s confidence about the economy and their own pay packets. After car sales fell off in 2008 and new car registrations dipped below 2 million in both 2009 and 2011 but after these turbulent years this no longer seems to be a problem as the UK is once again the second largest market for new car sales in the European Union, just behind Germany.
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