Car registrations up 7.9% says SMMT

The rate of growth was the strongest since the scrappage-induced rise in June 2010 and was the third, and largest, monthly increase in a row. Registrations rose 7.9% in the month to 162,288 units, boosted by 14.3% growth in private demand and marking the end of a three-month decline in the fleet market which rose 4.8% in May. Registrations over the five months so far this year are up 2.6% to 868,166 units. The 12-month running rate stood at 1.963 million units in May, almost unchanged from a year ago but some 20,000 units above the 2011 full year figure of 1,941,343 units. SMMT chief executive Paul Everitt said the increases were good news for the motor industry and the UK economy, "particularly the steady growth in demand from private buyers". He praised vehicle manufacturers for working hard to deliver value for money to motorists. "The consistent climb in new car registrations during the first five months of the year suggests that confidence is returning, despite financial uncertainty in the eurozone." David Raistrick, UK manufacturing leader at Deloitte, also welcomed the news but warned that the second half of the year would be "challenging", since major events such as the UEFA Euro 2012 and Olympic Games could lead to a drop in enquires and sales. "The increase in fleet sales is a welcome reversal of the downward trend," he went on. "However, with growing nervousness in the eurozone, businesses will continue to be cautious when reviewing their fleet expenditure. In contrast, growth in vehicle and engine production in the UK is being maintained and is reflected in the highest level of net vehicles exported by the UK since the 1970s." "Consumers continue to monitor their spending and are looking at ways to reduce household expenditure. This has resulted in reasonable demand for smaller fuel-efficient and easy to maintain vehicles." The Vauxhall Corsa was the best-selling model in May.