U.K. New-Car Market Enjoys Best May in Six Years

New-car sales in the U.K. jumped 11% in May to 180,111 units as private demand soared 20.9% compared with year-ago, outperforming pre-recession volumes of 2007.

But the Society of Motor Manufacturers and Traders says the market to date still remains down from 2007 levels.

The largest May sales tally in six years and the 15th straight month of growth left the year-to-date total up 9.3% to 948,666 units.

SMMT interim CEO Mike Baunton says while new-car deliveries through May were 9.2% below 2007 volumes for the same period, trends among private buyers provide a good indication that consumer confidence is robust.

“While it is clear that buying confidence among U.K. motorists is very strong, continued economic uncertainty abroad, particularly in the rest of Europe, will mean that manufacturers remain cautious about performance in the second half of 2013,” Baunton says in a statement.

SMMT says the growth reflects several factors, including consumers returning to the new-car market after delaying regular purchasing cycles, replacement of vehicles bought under the scrappage incentive scheme, switches to more-efficient vehicles in every class and attractive offers catching the attention of buyers with funds and access to financing.

A switch from used to new vehicles also may be occurring, as the recession-induced dip in new-car sales restricts the supply of used cars.

Fleet sales edged up 3.2% to 89,898 units in May, while business purchases climbed 9.4% to 6,011 and private sales through dealer outlets jumped 20.9% to 84,202.

This left fleet-segment deliveries after five months up 2.8% to 447,677 units, the business sector ahead 11.4% to 40,418 and private sales surging 167.2% to 460,571.

The Ford Fiesta continued to lead the market with 9,316 deliveries in May, ahead of the Ford Focus (7,522) and Vauxhall Corsa (6,634).

After five months, the Fiesta tops the sales list with 51,708 units, comfortably ahead of the Focus (38,547) and Corsa (37,279).

Despite the strength of the new-car market, commercial-vehicle deliveries fell 4.7% in May to 24,149 units, but remained up 8.3% year-to-date to 127,461.

Van sales fell 3.8% in May to 20,503 units for a 5-month total up 13% to 110,136. Truck demand fell 9.4% to 3,646 units in the month and was down 14.3% to 17,325 year-to-date.

SMMT Commercial Vehicle Manager Nigel Base says the overall CV market has performed well so far in 2013, but May saw volumes drop 3.8% as van model cycles combined with Euro 6 emissions-standards uncertainty for trucks.

“For trucks, history tells us that purchases of (Euro 5-compliant vehicles) will mix with new Euro 6 trucks as the year progresses, which could boost the market in the second half of 2013,” Base says. “For vans, the picture was positive up to May, so we anticipate this blip to be overcome as the year pans out.”