United Kingdom

Details

  • Industry: Automotive
  • Type: Press release
  • Date: 06/06/2013

UK car boom set to continue, says KPMG 

  • cheap financing, PPI compensation claims and greater fuel efficiency drove UK car demand to pre-recession levels in May

 

  

Figures released today by the Society of Motor Manufacturers and Traders show that UK new car registrations grew 11% in May, with private demand increasing by 20.9%, outperforming pre-recession volumes recorded in 2007.

 

John Leech, UK head of automotive at KPMG, commented: “The UK new car market continues to significantly outperform European markets and the rest of the UK retail sector.  Year-to-date the UK new car market is up 9.3%, driven by private buyers whose demand is up 16.2% year-to-date.  This is against the backdrop of stagnant UK household incomes, forecast to rise by only 0.5% in 2013 by the Office for Budget Responsibility and continuing falls in new car sales throughout Europe, including the stronger economies such as Germany, which fell 9.9% in May 2013.

 

“I believe there are a number of factors behind this outperformance.  Firstly, given the weakness in Eurozone markets, car manufacturers have turned their attention to the UK to keep their factories busy.  The new car market in the UK continues to be buoyed by substantial discounts offered by car manufacturers directly to consumers, such as 0% finance.  Analysts at CAP Automotive recently claimed that motorists are enjoying the best new car deals since 1979.  

 

“Secondly UK Banks are midway through settling PPI misselling compensation claims with UK consumers which have averaged £2,700 per claimant over the past 2 years and totalled £9 billion so far.  These one-off lump sums have released pent-up demand for cars.

 

“Finally, there have been some real advances in fuel efficiency offered by car manufacturers in response to a trend for consumers to favour smaller, fuel-efficient cars, which are up 14% year-to-date.  At 7.5 years old, the average age of cars on the UK roads is now higher than at any time over the past 20 years and consumers are increasingly choosing to switch these older cars for newer, much more fuel-efficient vehicles.”

 

John continued: “These factors look likely to remain in place over the coming months, which is good news for car manufacturers, dealers and the consumer.”

 

 

ENDS

 

For further information please contact:

 

Bona Boraliu, KPMG Press Office

0207 6941482 or bona.boraliu@kpmg.co.uk

 

 

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 over 12,000 partners and staff.  The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 156 countries and have 152,000 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.  KPMG International provides no client services.

 

 

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