New car sales achieved another motoring milestone with another record year in 2016 that saw also 2.7 million registrations but how will they fare in 2017. Motoring editor Andy Russell reports.
The UK new car market achieved another record year in 2016, with annual registrations climbing for the fifth year in a row to almost 2.7 million, according to figures published today by the Society of Motor Manufacturers and Traders (SMMT).
The market has experienced uplifts in 10 out of the last 12 months, albeit finishing with a December down slightly by minus 1.1% – with 178,022 new cars registered in the month.
Buyers were attracted by a range of new car models and attractive finance deals, pushing registrations up to 2,692,786 in 2016 – up 2.3% on the previous year and broadly in line with expectations.
Mike Hawes, SMMT chief executive, said: 'Despite 2016's political and economic uncertainties, the UK's new car market delivered another record performance as car makers offered an incredible range of innovative and hi-tech models.'
But he warned that 2017 could be more challenging with a weaker pound pushing up the price of imported goods.
'But, with interest rates still at historic lows and a range of new models arriving in 2017, there are still many reasons for consumers to consider a new car in 2017.
'Looking longer term, the strength of this market will rest on our ability to maintain our current trading relations and, in particular, avoid tariff barriers which could add significantly to the cost of a new car.'
The SMMT is forecasting that new car registrations in 2017 could fall more than five per cent on last year's record to 2.544 million units. And the 2018 market is forecast to fall a further 1.3% to 2.510 million registrations.
The UK new car market is one of the most diverse in the world, with some 44 brands offering nearly 400 different model types – and 2017 looks set to be another competitive year with almost 70 new launches already planned over the next 12 months.
Fleets were responsible for most of last year's growth, with demand growing to a record 1.38 million units. The private market remains at a historically high level, with more than 1.2 million private buyers registering a new car in 2016, although demand did fall over the latter three quarters. The competitive range of affordable finance, particularly attractive personal contract purchase (PCP) deals, is a crucial factor driving private demand as consumers are able to take advantage of low interest rates and flexible payment options.
Diesel and petrol cars continued to be by far the most popular fuel types for consumers with market share at 47.7% and 49% respectively - 1,276,871 diesel cars against 1,283,857 petrol.
However, alternatively-fuelled vehicles (AFVs) experienced a strong uplift in demand, up 22.2% across the year to 88,919 registrations for a 3.3% market share.
Plug-in hybrids and petrol electric hybrids, in particular, experienced significant growth, with demand up 41.9% and 25.1% respectively. Meanwhile, more than 10,000 motorists chose to go fully electric last year – up 3.3% on 2015.
Fiesta runaway sales winner
The Ford Fiesta supermini was again the best-selling car, for the eighth year running, by a clear margin.
In 2014, the Fiesta also became the UK's best-selling car of all time, overtaking the Ford Escort.
Here are the top 10 selling cars in the UK last year.
Ford Fiesta 120,525
Vauxhall Corsa 77,110
Ford Focus 70,545
Volkswagen Golf 69,492
Nissan Qashqai 62,682
Vauxhall Astra 60,719
Volkswagen Polo 54,448
MINI 48,328
Mercedes-Benz C-Class 44,184
Audi A3 43,808
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