U.K. Car Sales At Record High In 2016: SMMT

U.K. Car Sales At Record High In 2016: SMMT

For the second year running, United Kingdom vehicle sales hit a record high in 2016 despite fears that the Brexit vote would affect demand.

Business and private sales fell in 2016, down 1.2% to 105,786 units and 0.2% to 1.2m units respectively.

While rising inflation is expected to lead to slower consumer demand over the next 12 months, low interest rates and the increased availability of finance deals should prevent a drastic slump in sales, the SMMT added.

Diesel and petrol cars continued to be by far the most popular fuel types for consumers with market share at 47.7% and 49.0% respectively.

The SMMT anticipate a more hard year in 2017 driven by price increased caused by sterling weakness since Brexit.

SMMT chief executive Mike Hawes explains however that such a fall would still be considered "historically an incredibly high level".

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The top selling vehicle remains the Ford Fiesta followed by the Vauxhall Corsa with the Ford Focus in third spot.

Lauren Pamma, head of fleet consultancy at Lex Autolease, commented: "The SMMT's figures on the growth in alternative fuel vehicle registrations reflect what we're seeing".

Outlook: While 2016 will go down as a record year for the industry, the true impact of Brexit has yet to play out.

However the 77,110 registrations of the Corsa remain a strong performance in a year that saw Vauxhall fighting negative publicity resulting from at times misguided fire reports in older models.

The Society of Motor Manufacturers said full year sales rose 2.3% in 2016, in line with expectations, but registrations in December dropped 1.1%. "The truth is there's a latent demand built up from 2011 after several tough years during the recession, and we expect that to lose some of its momentum in the year ahead". This was more than 43,000 ahead of the runner-up in the new auto top 10, the Vauxhall Corsa.

"With the prospect of rising import prices and greater uncertainty in underlying consumer demand, added to a lack of clarity as to changes in pre-registration activity, I expect 2017 to present more hard trading conditions generally". The latter will remove incentives to buy some low-emission cars and add taxes to cars costing over £40,000.