Consumer confidence powers UK new car market

Consumer confidence powers UK new car market

UK car sales continued to grow in April reflecting the underlying sharp improvement in UK consumer confidence.

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KPMG’s UK Head of Automotive, John Leech, commenting on the 8.2 per cent rise in April’s UK car sales published by the SMMT today, said:

“UK car sales continued to grow in April reflecting the underlying sharp improvement in UK consumer confidence. The market continues to be supported by cheap finance offers from car manufacturers, PPI claim payouts and fuel cost savings from switching to a new car but these do not explain the year-on-year improvement. Rather it is the improving consumer sentiment which has unlocked demand pent-up during the recession.

“Recent surveys of UK consumer demand such as the authoritative GfK UK Consumer Confidence Index have painted a consistent picture – people are reporting a dramatic improvement in their own personal finance situation in the last year and expect this to continue over the next year.”

“Importantly, UK consumers see a dramatic improvement in their ability to make major purchases (in the GfK survey this has risen a full 21 points in the last year). 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 stabilize 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,” he added.

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About KPMG

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff.  The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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