A number of positive signs remain for the new car market:
- There is no immediate indication that finance costs will increase
- The possibility of an interest rate rise is receding as inflation remains below the Bank of England’s target
- Higher levels of employment should give more private buyers the confidence to make a purchase
- The continuing troubles in the Eurozone will encourage manufacturers to support the UK’s buoyant market.
The Deloitte forecast for 2015
- New registration figures to broadly match, or possibly even be slightly less than 2014. This will be across both the fleet and private markets.
- Private buyers will still largely be relying on financial products to fund their purchases, albeit with PPI pay-outs and similar providing assistance.
In the year ahead, it will be interesting to see whether the falling price of petrol and diesel impacts the alternatively fuelled vehicle market. It will also be worth watching whether changes in the pension industry, which will give people of retirement age full access to their pension fund, provide a further boost to the sector. Finally, it is possible we could see some pressure on residual values given the likely increase of nearly new stock hitting the used market.
Taking all of these matters into account, our analysis suggests that the UK’s new car market should continue to be a success story over the next twelve months, though it is unlikely that the rate of growth achieved over the past 34 months will continue.
The 2014 figures are great news, and more of the same or even slightly less in 2015, should be seen in an equally positive light.”
