Experts outline predictions for 2016 UK new car registrations
Data published yesterday by the Society of Motor Manufacturers and Traders (SMMT) shows that UK new car registrations for 2015 beat 2.6 million units for the first time after a 6.3% rise in demand, exceeding the forecast.
The latest rise marks four years of consecutive growth, with the market having posted increases in all bar one of the past 46 months.
Meanwhile fleet demand rose by 11.8% to reach an all-time high of 1.3 million units.
In response, John Leech, UK head of automotive at KPMG, said: “With UK consumer confidence for major purchases finally back to pre-financial crisis levels, UK new car sales have surely reached their plateau.
“Sterling was 12% higher compared to the Euro on average in 2015 which enabled vehicle manufacturers to offer higher incentives to consumers and dealers alike throughout 2015, and this is set to continue in the first quarter of 2016. Cheap finance in the form of Personal Car Plans (“PCPs”) remain attractive and the strength of used vehicle residual values has meant that many car manufacturers have bought back cars well before the PCP deal has expired further accelerating sales in 2015.
“It is unlikely all these factors will recur again throughout 2016 so my forecast is that new car sales will slip back 1% in 2016, with the first half of the year stronger than the second half.”
Glass’s has also issued its predictions for the coming year.
Head of valuations Rupert Pontin said: “Growth will continue through 2016 and Glass’s expect a 3% increase during the course of the year as the economy continues to grow and consumer confidence extends further. Total registrations for this year will be in the region of 2.71 million and the growth is likely to be driven by ever more appealing PCP schemes.”
He added: “The one word of caution is that as an industry we need to understand the impact of pre-registration and the effect it may have on used car values during 2016.”