LONDON (Reuters) - Britain’s car industry raised its forecasts for 2014 sales on Wednesday after strong first-half sales, predicting 2.45 million new cars would be sold this year, 8.1 percent more than in 2013.
The Society of Motor Manufacturers and Traders had previously forecast sales would grow just over 6 percent. But sales so far this year are already up by more than 10 percent at 1.46 million, helped by economic confidence and cheap finance as Britain benefits from record-low interest rates.
New-car registrations in July increased by 6.6 percent from a year earlier to 172,907 units - slower growth than for the first half of the year as a whole, but stronger than June’s 6.2 percent rise.
Up to four in five new-car purchases are now made on credit in Britain, with many customers effectively renting a new car - typically for three years - before trading the vehicle in for a new model using a scheme known as a personal contract plan.
But Britain’s buoyant car market may be cooling as it enters the 29th month of consecutive growth since recovering from the 2008-09 financial crisis. Sales nose-dived then, and the government intervened to support the industry with a scrappage scheme.
Car sales were one of the first areas of British consumer demand to recover after the economic downturn.
Ford’s Fiesta supermini held on as Britain’s top selling car, SMMT data showed, followed by its mid-sized Focus model and the Vauxhall Corsa.
Reporting by Costas Pitas, editing by David Milliken; Editing by Larry King