Car sales stay in fast lane, SMMT new registrations show

Car sales enjoyed their strongest January performance for 11 years, with new car registrations rising 2.9% in the month after what was already a record year in 2015.

Private registrations fueled the growth, data for January from the Society of Motor Manufacturers (SMMT) showed, soaring 8.2% to their highest level since 2004 of 73,061 vehicles.

The fleet sector declined slightly by 1.1% to 89,901.

Electric and hybrid vehicles and those fueled by propane and natural gas, collectively known as alternatively-fuelled vehicles (AFV), took a record 3.6% market share with a 32.1% increase to 6,075 registered cars.

Petrol hybrids showed the largest growth – up 44.1% to 3,783 cars, while plug-in hybrid demand grew 32.3% to 1,592 vehicles and pure electric cars enjoyed an uplift of 14.1% to 584 units, the SMMT said.

Demand for diesel, which just retained the majority market share, remained stable, up 0.6%, while petrol registrations grew 3.7%.

"January’s solid performance puts the new car sector in a good position to start the year," said SMMT chief executive Mike Hawes.

"Providing consumer confidence remains strong, Hawes said he expectd a "more stable" 12 months ahead, broadly similar to the record 2015.

In the fourth successive year of growth, car sales rose 6.3% during 2015 to reach an all-time high of 2.63m vehicles, ahead the 2.58m in 2003.

Economist Howard Archer while the year-on-year gain maybe did not look that impressive at 2.9%, "it needs to be taken into consideration that the gains are now coming from a very high base following extended healthy gains in car sales.

"Indeed, it is going to be ever more difficult for car sales to achieve year-on-year gains."

However, he added that with falling fuel prices and low interest rates economic fundamentals still looked largely healthy for the motor industry, which could allow car sales to hold up at an elevated level over 2016, while also being buoyed by attractive offers, finance packages.