Latest data from the Society of Motor Manufacturers and Traders (SMMT) shows that UK new car registrations for 2015 beat 2.6 million units for the first time after a 6.3% rise in demand, exceeding the forecast.

The latest rise marks four years of consecutive growth, with the market having posted increases in all bar one of the past 46 months.

Figures were bumped up by the highest ever performance in December, which saw 180,077 new cars registered – up 8.4%.

Fleet demand rose by 11.8% to reach an all-time high of 1.3 million units. The sector was also boosted by a strong December, which saw fleet registrations rise 13.8% to 103,000 units.

Conversely, the sub-25 ‘Business’ market recorded a decline, with the total for 2015 down 9.6% to 107,121 units whilst the December figure was down 51.0% to 5,473.

Private demand however saw an increase of 2.5% for the year overall and 10.9% in December.

Across the market, gains were reported for all fuel types, with petrol and diesel registrations up 8.4% and 3% respectively with equal market shares. Alternatively fuelled vehicle (AFV) demand, meanwhile, grew 40.3%, securing the biggest ever market share of 2.8% for a year. Plug-in hybrids experienced phenomenal growth, with volumes more than doubling, while pure electric vehicles saw an uplift of around 50%.

John Leech, UK head of automotive at KPMG, commented: “With UK consumer confidence for major purchases finally back to pre-financial crisis levels, UK new car sales have surely reached their plateau. 

Sterling was 12% higher compared to the Euro on average in 2015 which enabled vehicle manufacturers to offer higher incentives to consumers and dealers alike throughout 2015, and this is set to continue in the first quarter of 2016. Cheap finance in the form of Personal Car Plans (“PCPs”) remain attractive and the strength of used vehicle residual values has meant that many car manufacturers have bought back cars well before the PCP deal has expired further accelerating sales in 2015. 

“It is unlikely all these factors will recur again throughout 2016 so my forecast is that new car sales will slip back 1% in 2016, with the first half of the year stronger than the second half.

“Looking beyond the UK, the recovery of the new car market in Europe really took root during 2015 with Germany back to pre-financial crisis levels of new car sales and Italy, France and Spain all posting strong gains. Across the EU sales were up 3% and this should continue in 2016 as unemployment is set to fall strongly. The US posted record sales in 2015 and looks to have finally plateaued mirroring the UK market. 

“China, Russia, Brazil and the Middle East however look set for another difficult year as falling consumer confidence, political instability and falling oil revenues are likely to cause weaker than forecast economic performance which will impact negatively on the UK’s premium car manufacturers such as JLR, MINI, Bentley and Rolls Royce.”