UK car sales hit a record high in 2016 - but industry boss says we've reached peak car

Emma Haslett
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Car sales in the UK may have peaked (Source: Getty)

UK car sales hit a record high in 2016, new figures have shown - but the boss of the industry's largest body said the UK may have reached "peak car".

The figures, by the Society of Motor Manufacturers and Traders (SMMT), showed 2.69m new cars were registered in 2016, up 2.3 per cent on the previous year.

That's the fifth year in a row registrations have climbed, with petrol cars continuing to be the most popular vehicles on the road, accounting for 49 per cent of the market, compared with diesel cars, whose market share fell to 47.7 per cent in 2016, down from 48.5 per cent in 2015.

Last month data suggested the number of cars manufactured in the UK rose to its highest level this century in November, jumping 12.8 per cent.

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However, there were some signs sales may be beginning to decline: December was one of just two months in which sales of cars fell, with sales dropping 1.1 per cent on the year before. to 178,000 cars.

Mike Hawes, the SMMT's chief executive, warned buyers may be less enthusiastic this year.

"2017 may well be more challenging as sterling depreciation raises the price of imported goods," he said.

At a press conference yesterday Hawes predicted a five per cent fall in sales this year, the Financial Times reported.

"We're talking about a market that is at peak demand, following the sector's resurgence after the recession. Growth at the rate we have seen can't continue forever."

"The serious concern for the car sector going forward is that it looks inevitable that the fundamentals for consumers will weaken markedly over the coming months with purchasing power being increasingly squeezed and the labour market likely weakening," added Howard Archer, chief European and UK economist at IHS Markit.

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