Sales of new cars on rise in January

Sales of new cars increased dramatically in January compared with the same time last year, industry figures show.

Last month 143,643 new vehicles were sold, up 11.5% on January 2012.

Fleet and business car sales also showed an upward trend of 8% to 82,568 units, compared with 76,160 last January. But the business purchases, including fleet vehicles, constituted almost three-fifths of new-car sector sales (57%), slightly down from the 59% recorded a year ago, the Society of Motor Manufacturers and Traders reported.

The society said it expected business in the new-car sector to expand, on a yearly basis, by 0.6% to see a total of 2.057 million vehicles sold by the end of 2013. For next year it predicts a 2.6% rise in sales, to a total of 2.11 million units.

People with the environment at heart seem to have been attracted to the industry's technological advances such as diesel-electric hybrids, extended-range electric vehicles and plug-in hybrids, the society suggested.

Vehicles are becoming more fuel efficient across all product ranges, which attracts buyers. Recently developed alternative propulsion vehicles have also come on the market in the past year, the society noted.

Nevertheless, increased sales were recorded in vehicles of most fuel types, while petrol-powered vehicles actually increased their market share. That is said to be attributed to the rise in sales of smaller vehicles and more private buyers who tend to opt for petrol engines.

Most parts of the automotive sector sold more units in January. Double-digit gains were recorded in the mini, dual-purpose, lower-medium and MPV segments, while the most popular car last month was the Ford Fiesta.

The society's interim chief executive, Mike Baunton, said the new car market had begun the year confidently. Lifted by a solid rise in private demand, the new car market had posted its 11th successive month of growth.

"Building on a strong performance in 2012, SMMT has increased its market forecast. We anticipate a modest rise over the year followed by further growth in 2014."

Sue Robinson, director of the National Franchised Dealers Association, said the new car market was performing well despite wider economic uncertainty.

"Although the NFDA don't expect to see major growth in the UK new car market during 2013, we do expect it to be stable. We expect the market to be supported by strong manufacturer deals and offers that will encourage consumers to buy."

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