LONDON -- UK new-car registrations in October rose 14 percent to 179,714, the Society of Motor Manufacturers and Traders (SMMT) said today, but the group added that growth would likely slow toward 2015.
The October result took ten month sales to 2.13 million, passing the 2 million mark in the period for the first time since 2007. Last month’s result was the 32nd consecutive month of growth in the market.
October's sales rise was much stronger than September's 6 percent sales jump, though September is a much bigger month for outright sales due to seasonal factors.
The UK market continues to benefit from sales made on cheap credit and will likely hit 2.46 million new registrations this year, which if reached, would be a return to pre-recession levels and the highest level recorded since 2004.
The SMMT expects 2015 full-year sales to reach 2.49 million units and remain flat in 2016, which would mark an end to the rapid rise in new-car sales in the market - a rare bright spot for the European auto industry in recent years.
"The October new car market outperformed expectations," SMMT Chief Executive Mike Hawes said. "With economic confidence still rising, customers continue to benefit from attractive financial packages."
Car sales were one of the first signs of consumer demand to pick up in Britain after the 2008-09 financial crisis, but there are now signs the broader economy is slowing after more than a year of robust growth.
Although UK industrial production data also out today beat expectations - partly because of a pick-up in car manufacturing - the housing market is slowing as buyers brace for a rise in interest rates next year.
Trevor Finn, the CEO of Pendragon, one of the UK's largest car dealerships, told Reuters that October's boost was down to the recent introduction of new finance deals by General Motors' Vauxhall brand, one of the UK's best-selling marques.
Finn said Vauxhall's retail sales were 30 percent higher in October compared to the same month last year.
Nearly four fifths of new-car purchases are now made on credit in the UK with many customers effectively renting a new car - typically for three years - before trading it in for a new model using a scheme known as a personal contract plan (PCP).
Fiesta remains No. 1
Ford's Fiesta subcompact remained the UK’s top-selling car last month, SMMT data showed, followed by the Ford Focus compact model and the Vauxhall Corsa subcompact.
The UK joined other major European markets in reporting a sales rise last month. Registrations in Germany rose 4 percent, while in Italy, sales rose 9 percent and in Spain, a government scrappage scheme helped to lift registrations by 26 percent. Sales in France fell 4 percent.
Reuters contributed to this report