The Times, Robert Lea (Industrial Editor), 6 June 2014.
During the Lawson boom, the nation was running around in millions of Ford Escorts, Vauxhall Cavaliers and MG Metros. Nigel Lawson’s defining feelgood factor of the Thatcher era also led to 26 consecutive months of growing sales of new cars from 1987 to 1989.
Twenty-five years later and that record has been eclipsed. New-car sales up 7.7 per cent last month means that registration statistics have risen in the past 27 months, growth that began even before George Osborne dared to use the word “recovery”.
While the Fiesta and Astra — both much remodelled — span the age, 2014 buyers have created a market that has seen the rise of the Nissan Qashqai and the renaissance of the Fiat 500.
The boom has been fired by a cocktail of reasons. They include the diversion by manufacturers of vehicles to Britain during the sales slump in Europe; many households benefiting from the billions of pounds of payment protection insurance compensation payouts; and the latest financial product from the industry, the personal contract purchase, whereby motorists keep a car for three or four years with monthly payments before swapping it for another model at the end of their term.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), added some further ingredients. “Increasingly confident consumers have been drawn to some fantastic new products, innovative technologies, improved fuel economy and competitive deals,” he said.
Total new sales in the first five months of the year were up 11.6 per cent at 1.05 million, putting 2014 sales on course to break 2.4 million. Sales of 194,000 vehicles in May were the strongest for that month since 2004.
Growth in new cars being bought by businesses outstripped private buyers and the rest of the market, rising by 26 per cent last month.
In the commercial vehicle sector, demand for new vans was up 18 per cent in the month and 13 per cent higher in the year to date, though that was partially offset by a fall of about 20 per cent in the smaller market for trucks.
With monthly comparatives for car sales getting ever harder after a strong 2013, Mr Hawes warned that some heat could start coming out of the market. “With the SMMT forecasting an overall rise of about 6 per cent over the year, the coming months should see some levelling off in growth rates,” he said.