Rising consumer confidence, cheap fuel and easy credit helped trigger a record 2.63m new UK vehicle registrations last year. Just one day after the US motor industry beat its own record set in 2000, official data from the Society of Motor Manufacturers and Traders revealed that 6 per cent more cars rolled off British dealership forecourts in 2015.
While impressive figures were widely expected, an uncharacteristically strong December saw them smash expectations, cementing a remarkable run of growth that's shown only one blip in 46 months. Mike Hawes, chief executive of the trade body, attributed this latest success mainly to increasing consumer confidence, wage growth, low unemployment and plummeting petrol and diesel prices.
But a range of other factors also contributed to this record-breaking performance. Firstly, a cheaper borrowing environment driven by ultra-low interest rates means about 80 per cent of new car registrations are backed by finance packages. The depreciation of the euro versus sterling shouldn't be underestimated, either. Currency swings have made the UK a more attractive market for European manufacturers, who've capitalised on this situation by offering attractive discounts on new models.
Topping the sales table were Ford's (NYSE:F) Fiesta and Focus models and General Motors' (US:GM) Vauxhall Corsa, suggesting manufacturers across the pond have similarly found joy on British shores. Other big names on the list included Daimler's (DE:DAIX.N) Mercedes vehicles, fellow luxury carmaker BMW (DE:BMW) and Japanese manufacturer Nissan (JP:7201).
Interestingly, even troubled German giant Volkswagen (DE:VOW3) emerged relatively victorious from its reputation-damaging emissions scandal, with sales of its core marque rising 4.2 per cent to 223,784. The Golf was the fourth highest selling car during the year with 73,409 registrations. Audi sales also rose in 2015, although VW's other brands - Skoda and Seat - both posted declines.
But impressive figures from both sides of the pond weren't enough to lift the gloomy mood surrounding equity markets. Sluggish economic growth in key car markets, such as China, continues to weigh on sentiment, hence why shares across the sector remained in the doldrums. Following the announcement, supply chain specialists such as Carclo (CAR), GKN (GKN) and Ricardo (RCDO) were down, and this was similarly the case for vehicle retailers Vertu Motors (VTU), Pendragon (PDG) and Inchcape (INCH).
The world's second-largest economy has been a key hunting ground for car manufacturers as its newly rich inhabitants aspire to emulate their western counterparts. So news that sales there rose just 4.7 per cent in 2015, against 9.9 per cent in 2014 and 16 per cent in 2013, unsettled markets.
Luxury brands, which are typically more profitable and less volatile than the mass-market passenger car segment, were among the biggest victims of this waning appetite. Sales of BMW's Rolls-Royce fleet of Phantoms, Ghosts and Wraiths plummeted 54 per cent in China last year, marking a sharp turnaround from several years ago when it was selling more than 1,000 luxury vehicles. Volkswagen's Bentley similarly posted big declines.
Fortunately, there were some exceptions. For example, Daimler's Mercedes-Benz continues to be in hot demand across the Far East, thanks mainly to the recent launches of its GLC sport utility vehicle and new C-Class.
