Latest data from the Society of Motor Manufacturers & Traders shows that a total of 2,476,435 new cars were registered in the UK in 2014 – up 9.3% on 2013 and representing the most registrations in a calendar year since 2004. Fleet sales rose 8.7% over the whole of 2014, reaching a total of 1,178,416 units compared with 1,084,279 for 2013. The sub-25 business sector saw even stronger growth, with 2014 registrations up 12.0% to 118,520 units from 105,836 the previous year. And private registrations also continued to grow, with a rise of 9.8% for 2014 to 1,179,499 units.

The year was particularly strong for alternatively-fuelled vehicles as increased choice, coupled with a growing desire for reduced costs and greater efficiency, resulted in a quadrupling of plug-in car registrations over 2013.

In response. Phil Harrold, automotive partner at PwC, said: ‘These figures are great news for the UK automotive industry. Not only are three of the top 10 selling cars of 2014 made in the UK, the engines of the top two are also manufactured here.

‘Looking deeper into the figures, it’s also interesting to see the polarisation occurring in the market with the continuing  rise of the super-minis and the move away from medium-sized family vehicles to cross-overs which offer lots of space and practicality. We expect this trend to continue in 2015.’

David Raistrick, UK automotive leader at Deloitte, added: ‘At the beginning of 2014, it was clear that we were going to see healthy levels of growth in new vehicle registrations, although the final numbers of almost 2.5m have surpassed everyone’s expectations, especially given the difficulties experienced in the mainstream European markets.

‘There is naturally going to come a time when the UK new car market’s record run of comparative monthly growth will come to an end. However, when this point comes, and our analysis suggests it will be 2015 with a plateau having now been reached, it is important that the market reaction is measured. A levelling off in new registrations should be balanced against the reality that as recently as only three years ago, new cars sales were less than 1.95 million, and the European market has been in free fall over this period. Equally, there is a finite limit to the numbers of new cars required every year, no matter how buoyant the markets may be. Current levels are hugely positive, and flat sales this coming year, or even a slight reduction, should still be seen as a positive position, and not a tale of woe.

‘A number of positive signs remain for the new car market.  There is no immediate indication that finance costs will increase, with the possibility of an interest rate rise receding as inflation remains below the Bank of England’s target.  Higher levels of employment should give more private buyers the confidence to make a purchase.  Finally, the continuing troubles in the Eurozone will encourage manufacturers to support the UK’s buoyant market. 

‘In the year ahead, it will be interesting to see whether the falling price of petrol and diesel impacts the alternatively fuelled vehicle market.  It will also be worth watching whether changes in the pension industry, which will give people of retirement age full access to their pension fund, provide a further boost to the sector.  Finally, it is possible we could see some pressure on residual values given the likely increase of nearly new stock hitting the used market.

‘Taking all of these matters into account, our analysis suggests that the UK’s new car market should continue to be a success story over the next twelve months, though it is unlikely that the rate  of growth achieved over the past 34 months will continue. Our forecast for the next 12 months is for new registration figures to broadly match, or possibly even be slightly less than 2014. This will be across both the fleet and private markets. Private buyers will still largely be relying on financial products to fund their purchases, albeit with PPI pay-outs and similar providing assistance. We see no reason for this to change over the coming year.

‘The 2014 figures are great news, and more of the same or even slightly less in 2015, should be seen in an equally positive light.’