Hopeful signs for year ahead as new car sales up 5.3pc

The increase was the biggest since 2001, with sales of new vehicles boosted by strong consumer demand, the Society of Motor Manufacturers and Traders (SMMT) said.

Sales of new cars reached 2,044,609 over the year, with a 3.7 per cent increase in December alone compared with the same month in 2011.

SMMT chief executive Paul Everitt said the new car market grew last year at the fastest rate for more than a decade, driven by innovative, fuel-efficient models.

Diesel cars took a record 50.8 per cent market share, with sales of just over a million compared with 978,000 petrol vehicles.

Sales of alternative fuel vehicles, such as electric, increased by 9.4 per cent to almost 28,000, a market share of 1.4 per cent, a new high.

Private sales of new cars increased from 823,000 to 929,000, fleet sales increased by 0.6 per cent to just over a million, while business sales fell by 9.5 per cent to just under 90,000.

The SMMT said 2013 would be “challenging”, but it expects performance to be on a par with 2012. “Looking ahead to 2013, we anticipate the market will hold firm,” said Mr Everitt.

IHS Global Insight economist Howard Archer said car sales were “one relatively bright spot for the economy in 2012”.

He said: “The resilience of private car sales in December gives a lift to hopes that consumers will spend a reasonable amount over the coming months as they are helped by recent decent employment growth and an overall improvement in their purchasing power during 2012.”

However, he said rising inflation and shrinking earnings will also pile pressure on the sector.

“Despite the overall improvement in consumers’ purchasing power in 2012, the motor industry faces far from easy conditions at the start of 2013 with consumers still confronted by significant headwinds and businesses under pressure to contain costs,” he said.

The Fiesta has been the best-selling model since 2009, although the Focus topped the list for December alone.

The top 10 best-sellers for 2012 were the Fiesta, Corsa, Focus, Astra, VW Golf, Nissan Qashqai, BMW 3 Series, VW Polo, Mercedes C-Class and BMW1 Series.

The SMMT also said new registrations from the UK bus and coach market rose 34.2 per cent to 8,102 units in 2012, ending the year on a high.

Yorkshire is home to bus-makers including Optare, based in Sherburn-in-Elmet, and Plaxton, in Scarborough.

“2012 was a bumper year for the UK bus and coach sector,” said Mr Everitt.