British car sales surge back up to pre-recession levels

Reuters

By Olesya Dmitracova

LONDON, Oct 4 (Reuters) - New car sales in Britain soared totheir highest level in more than five years last month, liftedby a brighter outlook for the economy, attractive financingdeals and demand for new fuel-efficient models.

New car registrations surged 12.1 percent compared with ayear ago to 403,136 units, the Society of Motor Manufacturersand Traders said on Friday.

That is the highest monthly level since March 2008, justbefore Britain plunged into its deepest recession ingenerations.

September is a key month for Britain's auto industry as itmarks a twice-yearly change in registration plates. Nonetheless,the trade body and analysts think the improvement is unlikely totail off.

"As we head into the quieter months, I suspect we'll seesales hold firm, keeping the UK market zooming ahead of ourEuropean counterparts," said Richard Lowe, head of retail andwholesale at Barclays.

Solid car trade in Britain contrasts with a decline inGermany, Europe's biggest car market, and the gap between thetwo is narrowing as a result.

So far this year, 1.79 million new cars have been sold inBritain, compared with 2.22 million in Germany. The latter was 6percent fewer than at the same point last year.

Ford's Fiesta claimed the top spot in Britain'sbest-seller list in September, followed by General Motors-ownedVauxhall's Corsa and Ford's Focus, reflecting motorists'budget-conscious approach.

Britain's economy has shown signs of accelerating growth inrecent months after several patchy years, with rising optimismunleashing pent-up consumer demand and boosting spending.

"This is the 19th consecutive month of steady growth (in carsales) and, with fleet and business demand still to reachpre-recession levels, we believe the performance to besustainable," said Mike Hawes, SMMT chief executive.

Sales of new cars in Britain have been supported this yearby high fuel prices, low interest rates and compensation tovictims of a banking scandal.

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