The UK has recorded its biggest monthly car sales in almost 20 years, with more than 500,000 new vehicles registered in March.
The figures, regarded as a barometer of economic confidence, are up 5.3% on March last year, making it the busiest month for traders since twice-yearly number plate changes were introduced in 1999.
The Society of Motor Manufacturers and Traders (SMMT) ascribed the record sales to a combination of consumer confidence, low interest rates and new technology.
The British-based manufacturer Jaguar Land Rover, which is owned by Tata, achieved its best retail month in the UK, selling more than 25,000 vehicles, up 16% year-on-year.
Mike Hawes, the SMMT’s chief executive, said: “The sector’s strong growth in March rounds off a robust first quarter as British consumers continue to demonstrate their appetite for new cars, especially ultra-low emission vehicles. This confidence should see registrations remain at a high but broadly stable level over the year, but could be undermined by political or economic uncertainty.”
The major uncertainty, he said, was the EU referendum, with motor manufacturers having recently joined forces to warn against the possibility of Brexit.
Hawes said that for now, economic indicators such as low interest rates, rising house prices and low unemployment were aiding confidence and sales. “Financing is an important factor, with low interest rates and fixed plans. Consumers appreciate the certainty on how much they are paying for their cars.”
New technology was also driving sales, Hawes said. “There are a few new models out there, which tend to be more fuel efficient. And people do want the connected technology. Young people in particular want features like syncing phones with the car.”
Forty-three consecutive months of sales growth came to an end last year, but Britain’s car market has remained more buoyant than in much of the rest of Europe, where trade remains below pre-recession levels. Sue Robinson, director of the National Franchised Dealers Association, said the sector was “in a good position for 2016”.
Sales to private customers rose by 3.8%, and business fleet sales increased 6% after slight declines earlier in the year.
Sales of electric cars and other alternatively fuelled vehicles rose 21.5% from last March, although they represent fewer than 3% of total sales.
Volkswagen, whose sales had fallen amid the diesel emissions scandal, halted the trend in March, with a fractional increase on last year. Sales for the year to date, however, are still almost 5% below the same period in 2015, following its admission that it had fitted “defeat devices” in certain diesel engines to rig tests.
About one in seven of the cars sold in the UK is made in the country, with volumes expected to rise until 2020 after recent investment. Jaguar Land Rover, Britain’s largest automotive manufacturer, said its two brands had combined to sell 25,127 vehicles, with Jaguar reporting its strongest UK sales in more than a decade.