New car sales motor along but 2017 likely to be bumpier

Sales of new cars in Scotland edged ahead last year to the second-highest total on record, new figures have revealed, but industry bosses warned that 2017 was likely to prove 'more challenging'.

Ford Fiesta was best-selling model in December 2016. Picture: Contributed

Annual registrations north of the Border came in at 220,906 units for 2016 as a whole, ahead of the 220,554 sold in 2015 but behind 2014’s bumper result.

December 2016 saw registrations increase by 7.4 per cent, year-on-year, equal to an additional 878 vehicles, according to new figures from industry body the Society of Motor Manufacturers and Traders (SMMT). The top three best-sellers last month were the Ford Fiesta, the Vauxhall Corsa and the Dacia Sandero.

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Industry leaders said drivers had been enticed with a “huge range” of new models last year supported by “outstanding finance deals and good availability of stock throughout 2016”.

The Scottish break-out figures came after it emerged that annual new car sales for the UK as a whole had reached an all-time high for a second consecutive year. Some 2.69 million cars were registered in the UK in 2016, the SMMT said, up by 2.3 per cent on 2015.

Sandy Burgess, chief executive of the Scottish Motor Trade Association, said: “Despite the various challenges we experienced in 2016 with the political and economic uncertainties, Scotland’s new car market delivered another significant performance as our dealers were able to bring a fantastic range of innovative and high-tech models to market.

“2017 is shaping up to be a more challenging year with the impacts of recent sterling depreciation raising the price of imported goods, fuel prices starting to increase and further unease around the Brexit situation but, with interest rates still at historic lows and lots of new models arriving in the dealers’ showrooms throughout 2017, there are still plenty of reasons for consumers to consider a new car in 2017.”

SMMT chief executive Mike Hawes said growth was due to “very strong” consumer confidence, low interest finance packages and a raft of new models.

IHS Global Insight’s chief UK economist Howard Archer noted: “The serious concern for the car sector going forward is that it looks inevitable that the fundamentals for consumers will weaken markedly over the coming months with purchasing power being increasingly squeezed and the labour market likely weakening.”