UK car sales growth matches 1980s record

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Aston Martin car in James Bond film The Living Daylights (1987)

Aston Martin car in James Bond film The Living Daylights (1987). UK car sales growth is harking back to the 1980s. Photograph: Ronald Grant Archive

British appetite for new cars surged ahead in April, as a rosy outlook for the UK economy triggered an upwardly revised sales forecast in 2014.

New car registrations rose 8.2% last month, to 176,820 vehicles, marking the 26th month of rising sales and matching the previous longest period of expansion, in the late 1980s.

It followed a 17.7% increase in March, which is typically a strong period for registrations because it is a plate change month.

Demand and an improved economic backdrop prompted the Society of Motor Manufacturers and Traders (SMMT), the trade body which publishes the data, to revise its forecasts for new car sales in 2014 from 2.3m to more than 2.4m. That would be a 6% increase on 2013.

Mike Hawes, SMMT chief executive, said: “After the bumper plate-change month of March, the UK car market returned to more modest but still positive growth in April. This marks 26 consecutive months of growth as GDP continues to pick up, inflation falls and wage levels improve.”

April’s registrations took the total in the first four months of the year to 864,942, up 12.5% on the same period in 2013. Sales have been supported in recent months by the wide availability of car finance deals and a rising demand for more fuel efficient vehicles.

The bestseller last month was the Ford Fiesta, followed by the Ford Focus and the VW Golf.

The UK economy grew by 0.8% in the first quarter of the year, following 0.7% growth in the last quarter of 2013. Meanwhile inflation is below the Bank of England’s 2% target, unemployment is falling, and wage growth is picking up.

Howard Archer, chief UK economist at IHS Global Insight, said car sales continued to be a driving force in the economy.

He said: “Private car sales are being supported by a combination of much improved consumer confidence, rising employment, attractive offers and packages, and motorists’ desire to buy more fuel efficient cars. In addition, consumers’ purchasing power is now improving with earnings growth moving above consumer price inflation.”


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