Car purchases accelerate to pre-crisis levels in May

NEW MOTOR sales have now reached the peak last seen before the recession impacted the industry, according to the Society of Motor Manufacturers and Traders (SMMT)

According to figures released by the SMMT yesterday, the market for new cars in May expanded by 11 per cent on the same month in 2012.

The rise was powered by private demand, which shot up 20.9 per cent, alongside a 3.2 per cent rise in fleet registrations. There were 180,111 new cars registered as sold in May.

The best-selling cars remained the Ford Fiesta and Focus, and the proportion of petrol cars increased to 48 per cent, from 46.3 per cent 12 months ago. The number of alternative fuel vehicles, typically hybrid or electric cars, actually fell by 5.2 per cent over the year. The number of new cars bought for business increased roughly in line with the overall trend, with an increase of 9.4 per cent.

The market for new cars has now grown continuously for the past 15 months, reflecting increases in private sales. The industry is quite buoyant, as the first UK trade surplus in cars since 1976 was recorded last year.

Howard Archer, chief UK economist at IHS Global Insight said: “It is evident that private new car sales have been supported by attractive offers and packages, as well as by motorists’ desire to buy more fuel efficient cars at a time of high petrol prices”.

The SMMT noted that because car sales had recently been lower, there was now a relative shortage of used cars being sold second hand, and so some consumers were looking to buy new vehicles instead.

Mike Baunton, SMMT chief executive, added a cautionary note: “continued economic uncertainty abroad, particularly in the rest of Europe, will mean that manufacturers remain cautious about performance in the second half of 2013”.