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New car sales on the road to a summer high

SALES of new cars are expected to return to their pre-credit crunch peak for the first time in seven years this summer.

The latest registration figures for April show new car sales in the first four months of 2014 were up more than 10% in Scotland,lagging slightly behind the UK as a whole but continuing a steady recovery in demand over the past three years.

Total UK sales are now forecast to break through 2.4 million next month or July, a return to figures last seen in 2007.

Traders in Scotland recorded 15,892 new car sales in April alone, up 3.4% on April last year.

The largest regional sales increase for the year to date was in the Borders, with new car registrations up 18%. Grampian and Tayside were close behind with increases of more than 16% each.

Douglas Robertson, chief executive of the Scottish Motor Trade Association (SMTA), said: "We are pleased the April figures show a further increase after the record new plate month of March.

"Although the increase is much more modest it shows consumer confidence remains and we anticipate the end of 2014 will show an increase over last year of about 5%.

"Our members' showrooms continue to report an increasing number of people as consumers become more aware of the fuel efficiency of new cars and the consequent reduction in running costs."

Sales of diesel cars have outstripped petrol by about 2500 so far, according to the UK-wide figures, while sales of alternative fuel vehicles (AFVs), such as hybrids and electric cars, surged 53% in the first four months of 2014, compared to the same period last year. However, AFVs are still a fraction of the overall car market, accounting for less than 2% of overall sales.

The biggest selling car brand in Scotland, Vauxhall, has recorded 10,120 new registrations to date, although the Ford Fiesta remained the most popular make and model overall.

Sales of luxury brands are also up, with Audi and BMW recording respectively 6% and 4% growths in sales.

At the high-end of the market, showrooms in Scotland have also totted up sales of eight Aston Martins, 15 Ferraris, three Lamborghinis and one Rolls-Royce.

John Leech, UK head of automotive for KPMG, said the sales boom was being driven by cheap finance offers, PPI payouts and potential fuel savings.

However, he said the market was likely to level out in 2015.

He said: "The SMMT has increased its forecast for car sales in 2014 to over 2.4 million units in response to these factors. We expect the UK market to stabilise at this level as PPI claim payouts will fall away during 2015, offset by the churn created by the growth in the sale of new cars on three-year finance deals since 2012."

Chris Sutton, managing director of motor finance provider Black Horse, said: "We anticipate a strong second quarter for car sales but we need to consider when the sales market may level out and what manufacturers and dealers will need to do to maintain sales momentum."

Contextual targeting label: 
Automotive

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