Small fuel-efficient cars on the rise

Date posted: February 19, 2014

According to the latest industry figures hybrid cars are on the rise, as car sales increase 7.6% from last year. The Ford Focus remains the most popular car, holding the top spot for the past four years, with other small cars ranking highly including the Ford Focus, the Vauxhall Corsa and the Volkswagen Golf and Polo.

The larger Nissan Juke and Qashqai also feature on this list – a crossover car which has the best of a 4X4 vehicle and a city car.

The figures were provided by the Society of Motor Manufacturers and Traders (SMMT) who said that the results were highly influenced by consumers looking for a more fuel-efficient car. 

The SMMT’s chief executive Mike Hawes said: “As fuel economy is a major consideration for many motorists, ongoing investment by vehicle manufacturers in an innovative fuel-efficient technology is a key factor in the growing demand for new cars.” He added that 2014 looks set to see moderate growth in the automotive sector.

Consistent increase

This was the 23rd consecutive monthly increase, with carmakers selling nearly 155,000 cars in January 2014, compared to just over 143,000 in the same period in 2013. Sales reached a six-year high in 2013 when sales increased by 10.8% overall.

Alternative fuelled cars are becoming more popular, dominated by hybrid cars, perhaps in part to their wider availability, and also as motorists become more mindful of their fuel consumption. Sales increased by 25% year-on-year. However, the SMMT also claims that a typical new car is 27% more efficient than a car built in 2007.

Fully electric cars also saw a huge increase, with over a 700% increase in sales from the previous year going up from 38 cars which were sold in January 2013 to 325 which were sold last month. A key help in this is the government’s Plug In Car Grant which awards buyers of electric cars up to £5,000 towards the cost of buying the vehicle.

The increase in sales can be attributed to a combination of a better jobs market, cheap finance deals, and customers’ needs to buy a car which has better fuel efficiency, given the rising price of fuel.

Consumer confidence up

Chief UK economist at IHS Global Insight, Howard Archer said: “The motor industry will be hoping the recent robust UK economic activity is sustained and extended, and this underpins consumer and business confidence, and their willingness to splash out on new cars.”

He added that car manufacturers will be “very pleased” to hear that consumer confidence in the automotive industry jumped to a 76-month high last month, it’s highest level since December 2010.

However, Archer warned that even though there has been an increase in car sales, customers are still strapped for cash as wages are below inflation. He said that consumers purchasing power has only eased modestly and “earnings growth is test to see any meaningful pickup.”