Even though the car market in Europe has recently decreased rapidly, it seems as though it has still not affected the UK car market as once more it has been reported that the number of new registrations has increased. Compared to April last year, car sales were up by around fifteen per cent, and in the first three months of 2013 the amount of cars sold was nine per cent higher than the year before. Furthermore, it seems as though it is individuals and not businesses that are boosting the market, as last month private sales alone was 32 per cent higher than in April 2012.
It has been suggested that one of the reasons many people in the UK are buying new cars is because of increased fuel costs, meaning more people are looking to buy cars that are fuel efficient and more eco-friendly. Furthermore, it has become easier for people to buy a new car due to the fact that most companies now offer finance packages, as well as deals when it comes to road tax and motor insurance. Some analysts have also suggested that people are now buying cars due to the fact that their older models are now starting to deteriorate.
Discussing the figures, Howard Archer of IHS Global Insight said: “We’ve had bad economic times for an extended period. A lot of people have delayed buying new cars, so more and more people are getting to the stage where their cars have had it. It does lift hopes that consumers are prepared to spend on big items.” However, Mr Archer has also warned that the car market is still risky, and added: “A serious concern for the industry is that consumers could rein in their spending on big-ticket items over the coming months as their purchasing power is squeezed by higher consumer price inflation and muted wage growth.”
“There have also been recent signs that employment is stuttering after growing markedly through 2012. A worry for the car industry therefore is that many fleet operators and businesses will delay replacing vehicles to help contain their costs in an extended weak and uncertain economic environment.” At the moment it’s good news for car dealerships and those that work in the motor industry, however later on in the year we could see the market becoming more like that in Europe.