Consumer confidence powers UK new car market
KPMG’s UK head of automotive, John Leech, commenting on the 8.2% rise in April’s UK car sales published by the SMMT today, said: “UK car sales continued to grow in April reflecting the underlying sharp improvement in UK consumer confidence. The market continues to be supported by cheap finance offers from car manufacturers, PPI claim payouts and fuel cost savings from switching to a new car but these do not explain the year-on-year improvement. Rather it is the improving consumer sentiment which has unlocked demand pent-up during the recession.
“Recent surveys of UK consumer demand such as the authoritative GfK UK Consumer Confidence Index have painted a consistent picture – people are reporting a dramatic improvement in their own personal finance situation in the last year and expect this to continue over the next year.”
“Importantly, UK consumers see a dramatic improvement in their ability to make major purchases (in the GfK survey this has risen a full 21 points in the last year). The SMMT has increased its forecast for car sales in 2014 to over 2.4 million units in response to these factors. We expect the UK market to stabilize at this level as PPI claim payouts will fall away during 2015 offset by the churn created by the growth in the sale of new cars on three-year finance deals since 2012.”