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Figures revealed by the SMMT show that in total, 2.47 million new cars were registered last year which is a 9.3 per cent rise on the previous year and is overall the best annual performance since 2004.
2014 was a positive year for the car industry with new car sales slowly increasing each month, with December representing the 34th consecutive month of growth.
The SMMT believes that the strong performance is an indication of the increased demand for new vehicles following the recession years. Car sales were badly affected by the recession which began in 2008, which saw new registrations drop below 2 million in 2009 and 2011.
The latest figures demonstrate that new car registrations are now back at pre-recession levels with only 2002, 2003 and 2004 seeing more registrations than last year.
MMT chief executive Mike Hawes said: “We expect a more stable 2015 as demand levels off.”
Sales of electric cars saw the biggest growth last year, with sales quadrupling to 14,498 from 3,586 in 2013, whilst the Ford Fiesta remained the UK’s top selling car, followed by the Ford Focus and the Vauxhall Corsa.
Sue Robinson, director of the NFDA said: “It is extremely encouraging to see that the car market hit a 10-year high in 2014.
“Competitive offers by manufacturers along with strong finance offers boosted sales as consumer confidence returned to the market.
“Car showrooms have reported increased sales activity and interest from consumers looking to replace their vehicles, which in some cases are part of the aging car park or not as fuel or energy efficient as modern vehicles.”
The numbers mean the UK retained its ranking as the second largest market in the EU for new car sales, after Germany.
Best selling cars for 2014
1. Ford Fiesta: 131,254
2. Ford Focus: 85,140
3. Vauxhall Corsa: 81,783
4. Volkswagen Golf: 73,880
5. Vauxhall Astra: 59,689
6. Nissan Qashqai: 49,909
7. Volkswagen Polo: 48,004
8. Audi A3: 45,581
9. Fiat 500: 44,005
10. Nissan Juke: 39,263