LONDON -- UK new-car registrations rose 3 percent in January, according to data from the Society of Motor Manufacturers and Traders, helped by the first annual increase in demand from private consumers since March. The rise comes despite fears Brexit would hit sales.
A total of 174,564 new cars were registered last month in Europe's second-largest market, the SMMT said on Monday, boosted by a 5 percent increase in sales to individual consumers.
Analysts predict the UK car market will shrink by about 5 percent in 2017 after two years of record high demand, largely due to the Brexit-related fall in the pound that has pushed up the price of some models.
But the CEO of one of Britain's biggest dealership chains, Lookers, told Reuters key economic fundamentals remained in place to drive demand.
"The deals are good, unemployment is low and they are the things that have driven growth," Andy Bruce said.
Demand from business customers for fleet cars, the biggest proportion of overall registrations, also returned to growth in January after falling marginally in December.
Bruce suggested that an increase in excise duty, which will be paid on many new car sales due to come into force in April, might be bringing forward some demand to the first three months of the year.
• Download Excel file, above right, for January sales by brand.
"There will be an element of pull-forward in my view that people will be clamoring to get what's available today rather than ordering cars that will fall into quarter two," Bruce said.
Top brand sales
UK market leader Ford saw registrations rise by 3.3 percent in January. Sales at No. 2 Vauxhall fell by 9 percent, while volume at third-placed Mercedes-Benz rose 7.4 percent. Volkswagen, the No. 4 brand, saw a 7.5 percent rise.
The UK is the latest key European market to report a jump in sales growth. Registrations in Germany, France and Spain all grew 11 percent last month, while volume in Italy rose 10 percent.
Automotive News Europe contributed to this report