One of the UK’s leading motor experts believes that Britain’s car industry is on course for ‘a record year’. While sales of new cars in Europe continue to struggle, Tim Abbott, president of the Society of Motor Manufacturers and Traders (SMMT) said that sales in the UK were up 10 per cent, fuelled by PPI claims and cheap car leasing and contract hire deals.
The motor boss also believes that 2014 is set to be a great year for the British car industry, and the jobs and growth it creates. Keep reading to find out more.
New car sales in the UK set for a record year
Mr Abbott, who is also managing director of BMW Group UK, recently told VIP guests at the SMMT annual dinner in London: “With the full impact of many of the recent investment announcements yet to be realised, the UK is set for record volumes. Not many would have bet on that over the last couple of decades.
“The latest SMMT forecasts suggest 2014 will see a continuation of the recovery. We expect modest growth in both registrations and manufacturing as the big investments and model cycles crank up the pace.
“Yet who would have predicted such a short time ago that tonight our industry would be celebrating significant growth, investment and global success. It is helping create thousands of new jobs, safeguarding many more, and re-balancing the UK economy. Because when the UK automotive sector does well, the UK economy does well.”
The UK car market is up 10 per cent in 2013, fuelled by a number of factors including cheap car leasing deals, a desire from motorists for more fuel efficient cars and increasing economic confidence.
Mr Abbott added: “We’ve had the best footfall through our dealerships for many years. New car registrations have exceeded forecasts, and September was the best month for five years.”
PPI claims and cheap car leasing are boosting sales
One of the reasons that the UK’s new car market is performing so well is that many of the contract hire and car leasing deals on offer don’t require a huge deposit. That means that buyers are able to drive away a new car for perhaps 3-6 months’ payments.
Compensation from the Payment Protection Insurance mis-selling scandal is also helping the car market, as people choose to use their payout to buy or lease a new car.
Keith Lewis, of the SMMT, said: “People have been getting an average of £3,000 back from PPI claims, which isn’t enough to pay off the mortgage or replace the kitchen but it is enough for a deposit on a new car. We think there is still a year to go of PPI repayments and it is really boosting the market.”
In addition, some superb car leasing and finance deals at dealerships are tempting many people into driving a new car. Many manufacturers now have deals which allow drivers to lease a new car for under £100 per month, making new car ownership little more expensive than a standard utility bill.
However, Mr Abbott from the SMMT cautioned against a debt-fuelled ‘bubble’. He added: “We do not want a market artificially stimulated by over-stretched credit. Consumers are becoming more confident but it is a cautious optimism, borne of a painful crash.”