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Make cars while the economic sun shines

As the government is quick to tell us there’s still a long way to go down the road to economic recovery. But for the car industry at least, those green shoots are blooming faster than perhaps anyone expected.

It has been reported that May’s registration figures marked the longest ever period of sustained growth in the new car market. In fact, the UK has seen improving sales every month since March 2012.

This statistic is quite astonishing, bearing in mind the hardship that has been faced by the motor industry post 2007 when the downturn hit manufacturers’ pockets extremely hard.

Chief executive of the Society of Motor Manufacturers and Traders (SMMT), Mike Hawes, said of the news, “Over the past 27 months, increasingly confident consumers have been drawn to some fantastic new products, attracted by innovative technologies, improved fuel economy and competitive deals helping make a new car more affordable.”

Mr Hawes’ point is an interesting one, as research suggests that many road users are turning to new vehicles as a solution to austerity. This is because more efficient petrol, hybrid and electric cars can help to keep the running costs of vehicle ownership significantly lower – due to tax breaks and reduced dependence on costly fuel. Diesel cars now dominate the new car market with 51.3% of the market as of May and nearly 2% of the market is now hybrids and plug-ins – double what it was at the same point in 2013.

Not surprisingly the most popular cars to buy are still smaller vehicles such as the Ford Fiesta and the Volkswagen Golf.

Hawes goes on to say, “With [the] SMMT forecasting an overall rise of around 6% over the year, the coming months should see some levelling off in growth rates as underlying demand stabilises.”

This cautious statement does not, however, diminish the fantastic achievement for the car industry which has undoubtedly helped protect thousands of jobs in the UK and abroad. And according to stats from the SMMT, fleet registrations have played a big role in that upturn, taking nearly half of May’s market.

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