Motorists snap up new cars as sales boom continues –

Posted: Friday, September 04, 2015

In August, sales to private buyers rose by 7.2pc, business purchases were 11.8pc higher and fleet buyers increased by 12.1pc.

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The current low interest rate environment is allowing car makers to offer attractive deals that have been fuelling the market. Britain remains a popular destination for auto companies, with UK consumers still buying new cars compared with weaker markets in Europe.

Registrations of alternatively fuelled vehicles (AFVs) continued to race ahead, with the sector reporting a 52.3pc year-on-year gain. Environmentally conscious buyers drove away 1,918 cars powered by electricity or gas last month. AFVs now represent 2.4pc of the overall market.

Mike Hawes, SMMT chief executive, said: “August’s strong performance has again been driven by attractive finance deals and a diverse range of technologically advanced models.

“Britain’s budget-conscious buyers are taking advantage of low regular monthly payments that provide certainty and affordability.‎ With September’s new 65-plate now in full swing, we expect UK showrooms to be as busy as ever.”

Once again the Ford Fiesta remained Britain’s best-selling car, with 4,753 models purchased in August as motorists look for small, economical vehicles. Ford also took the number two spot with its Focus, with 2,673 sold.

Despite the market continuing to accelerate, Howard Archer, chief UK and European economist at IHS, warned that sales could hit the brakes at some point.

“Despite August’s strong gain, it is unrealistic to expect car sales to keep churning out strong year-on-year growth rates given that they have now risen for a record 42 consecutive months and are now coming from a high base,” he said.

“Private car sales should be supported by elevated confidence, improved earnings growth, negligible inflation, high employment and low interest rates. The Bank of England is now highly unlikely to raise interest rates until 2016, and they will then only rise gradually and by a limited amount.”

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