John Leech, UK head of automotive at KPMG, comments on the SMMT 2015 car sales figures. He said:
“With new car sales rising 8.4 per cent in December, 2015 broke the all-time sales record for new cars, as we had predicted. The new car market in grew by 6.3 per cent fuelled by strong consumer confidence, cheap transaction prices and the availability of cheap credit.
“With UK consumer confidence for major purchases finally back to pre-financial crisis levels, UK new car sales have surely reached their plateau. Sterling was 12 per cent higher compared to the Euro on average in 2015 which enabled vehicle manufacturers to offer higher incentives to consumers and dealers alike throughout 2015, and this is set to continue in the first quarter of 2016. Cheap finance in the form of Personal Car Plans (“PCPs”) remain attractive and the strength of used vehicle residual values has meant that many car manufacturers have bought back cars well before the PCP deal has expired further accelerating sales in 2015. It is unlikely all these factors will recur again throughout 2016 so my forecast is that new car sales will slip back 1 per cent in 2016, with the first half of the year stronger than the second half.
“Looking beyond the UK, the recovery of the new car market in Europe really took root during 2015 with Germany back to pre-financial crisis levels of new car sales and Italy, France and Spain all posting strong gains. Across the EU sales were up 3 per cent and this should continue in 2016 as unemployment is set to fall strongly. The US posted record sales in 2015 and looks to have finally plateaued mirroring the UK market. China, Russia, Brazil and the Middle East however look set for another difficult year as falling consumer confidence, political instability and falling oil revenues are likely to cause weaker than forecast economic performance which will impact negatively on the UK’s premium car manufacturers such as JLR, MINI, Bentley and Rolls Royce.”
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