Hard work has paid off for many of the UK’s franchised dealers as March’s new car market ended well ahead of expectations.

Registrations in the biggest month of the year totalled 394,806 cars, a rise of 5.9% year-on-year and some 40,000 units ahead of the forecast by the Society of Motor Manufacturers and Traders.

Adjusted to account for the one less selling day in March this year, the increase over March 2012 is more like 9.6%, said CAP.

Dylan Setterfield, CAP’s senior forecasting editor, told AM: “Some say retail demand is steady, others that it has fallen drastically – not grown 10%.”

March’s result was the 13th consecutive month of growth in new car registrations, with volumes the highest since 2010 when the Scrappage Incentive Scheme was driving private demand.

The SMMT said the better than expected outturn of the first quarter (Q1), with a 7.4% increase year-on-year to 605,198 units, should support net growth in the market in 2013.

Private registrations were up 11.2% in Q1, driven by strong sales efforts by the franchised networks and highly-competitive finance offers.

SMMT interim chief executive Mike Baunton said: “Despite ongoing economic concerns, consistent monthly growth in the market is an encouraging sign of returning consumer confidence as motorists are attracted to forecourts by new models and the latest technologies.”

The Q1 outturn was 2.7% above SMMT’s forecast, which could lead to the market exceeding SMMT’s 2.057 million unit full-year outlook.

However, foreign exchange rate fluctuations could stymie growth if further weakness of sterling impacts on the costs for national sales companies of importing vehicles.

Trading conditions remain challenging given the subdued wider economic setting.

Volumes for March were still some 12.1% below the 2007 pre-recession market total.

The SMMT believes the market’s growth over the past 13 months has been supported by increases in private registrations, although all sales types reported growth in March and Q1 2013.

Registrations of petrol-fuelled cars have risen by 12.1% so far in 2013, outselling diesels.

This has been spurred by growth in the small car and private sector markets. Alternatively-fuelled car registrations dipped in the month, but rose by 2.9% in Q1.

The mini segment again showed the strongest growth in March, up 56.5%, due to the success of new models.

Double digit gains were also reported in the MPV and dual purpose segments. All segments, except upper medium and luxury saloon, grew in March.

The Ford Fiesta was the best selling model in both March and Q1.

Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA), said: “It is positive that new car sales were up in March as retail demand continues to grow.

“Dealers reported strong interest in news cars by consumers who were encouraged into the showroom by strong manufacturer deals and competitive finance offers.

“Although consumer confidence remains sluggish there are signs that it is starting to grow.

"The NFDA is hopeful that this is a trend that will continue through 2013.”

March winners and losers

Ford took the lion’s share of the first month of 13-plate sales with a 14.44% slice of the market through a volume increase of 1.62% to 54,702 units.

Andy Barratt, Ford sales director, told AM: “Our retail performance was particularly encouraging.

"The market can be fragmented with short-cycle rental and pre-registration activity, but we really don’t participate in that.

"The dealer network really dug deep for the performance.”

However, rival Vauxhall is fighting back hard, with an 8.78% volume growth in March, equating to 3,393 more cars than it registered in March 2012.
Mercedes-Benz had a strong month with a 15.53% increase to 18,870 units boosted by robust demand for its C-Class range and the new A-Class.

Marcus Breitschwerdt, president and CEO Mercedes-Benz UK, said: “More new and returning customers than ever before are choosing to drive a Mercedes-Benz and that’s great news for them, and the thousands of dedicated people we’ve got all over the country who work so hard to achieve these extraordinary results.

“Everybody’s hard work and effort is paying off.

Making our attractive, exciting, affordable premium cars appeal to ever-more people is our mission and it’s a mission we’re continuing to meet head-on.”

Honda also posted a positive increase of 23.06% in March to 12,471 units with the help of low rate finance offers on the Civic.

Mitsubishi recovered in March posting a 54.20% increase to 2,185 units.