4th April 2014
The UK economy is continuing to flex its muscles as the latest numbers from the Society of Motor Manufacturers & Traders show that car sales have accelerated to a 10-year high.
According to the organisation, vehicle sales jumped by 17.7% year-on-year last month, as deals rose from 394,806 in March 2013 to 464,824, providing a significant boost to first quarter growth prospects for the overall economy.
The latest numbers represent dramatic gains on the 3% achieved in February and 7.6% in January.
The near 18% rise in registrations in March means car sales rose by 13.7% year-on-year overall in the first three months of the year, following overall growth of 10.8% during 2013.
Howard Archer, chief UK & European economist at IHS Insight says: “This is an even more impressive performance, given that year-on-year comparisons are now coming from a markedly stronger base. In fact, March marked a 25th month of year-on-year gains in car sales.”
While fleet sales were up 13.5% year-on-year in March to 194,955 units, private new car sales led the way, jumping 20.8% year-on-year to 246,660 units after increases of 2.1% in February and 17% in January.
Archer adds: “The squeeze on consumers’ purchasing power is now easing. Furthermore, there are clearly a substantial number of people who held off for an extended period from replacing their car due to difficult times that have now reached the stage where they really need or want to act and are more prepared to do so due to the brighter outlook.
“The motor industry will be hoping that recent robust UK economic activity is sustained and extended, and that this underpins consumer and business confidence, and their willingness to splash out on new cars. The squeeze on purchasing power is easing, primarily due to lower inflation although earnings growth is now rising modestly from very low levels.”