New car sales accelerate to record high for second year

2016 was good but 2017 is likely to be tougher for the car industry
2016 was good but 2017 is likely to be tougher for the car industry

Annual new car sales have reached an all-time high for a second consecutive year - but are expected to fall in 2017, according to an industry trade association.

Some 2.69 million cars were registered in the UK last year, the Society of Motor Manufacturers and Traders (SMMT) said.

This is up by 2.3% on 2015.

However, Northern Ireland once again trails the rest of the country with new car sales described as ‘flatlining’.

SMMT chief executive, Mike Hawes, said GB growth was due to “very strong” consumer confidence, low interest finance packages and a raft of new models.

“People are obviously driven by new technologies,” he told reporters at a briefing in central London.

“They expect equally to have that connectivity on the move.”

Mr Hawes predicted that registrations would decline by “between 5% or 6%” in 2017, but said this was still “historically an incredibly high level” and insisted it would not represent “a collapse in the market”.

He said five consecutive years of increased sales has been fuelled by latent demand built up during the recession.

“We have to recognise that growth can’t be inexorable,” he said. “There is undoubtedly a levelling off.”

However, Ulster Bank chief economist Richard Ramsey said the mainland figures were enviable.

“Meanwhile, the Northern Ireland new car sales market is stuck in the crawler lane.

“Local showrooms sold 57,324 new cars last year a rise of just 227 (+0.4%) on the previous year.

“Indeed new car sales in NI have been flat since 2014 and remain almost 17% (11,384) below 2007’s peak. Looking ahead, with rising fuel costs coupled with wider inflationary pressures, the consumer environment is set to get more challenging. A third year of stagnant car sales beckons.

“However, beneath the headlines it is worth bearing in mind that there are winners and losers in a ‘stagnant market’. While sales of non-premium cars have fallen by 2%, the premium end of the market – which includes the likes of Audi, BMW, Volvo and Porsche – posted a healthy rise of almost 13%.

“Sales of premium brand cars in Northern Ireland are now 12% above 2007 levels.”