UPDATE 2-UK new car registrations up more than 8 pct y/y in April-SMMT

Wed May 7, 2014 8:34am EDT

Related Topics

* UK car sales growth slows in April after bumper March

* SMMT revises up 2014 sales forecast to 2.4 mln, +6 pct yy

* Rising real incomes, cheap finance seen driving demand (Updates to recast lead)

LONDON, May 7 (Reuters) - New car registrations in Britain rose more than 8 percent year-on-year in April, buoyed by low interest rates and rising wages, but the number of new cars registered fell from its 10-year high in March.

April car registrations were 8.2 percent higher than a year earlier after jumping 17.7 percent year-on-year in March, data from the Society of Motor Manufacturers and Traders (SMMT) showed on Wednesday.

This prompted the SMMT to revise up its forecast for 2014 sales to more than 2.4 million registrations from a previous forecast of 2.3 million - equivalent to a six percent rise from 2013, when car sales were at their highest since 2007.

"After the bumper plate-change month of March, the UK car market returned to more modest but still positive growth in April ... as GDP continues to pick up, inflation falls and wage levels improve," said Mike Hawes, the SMMT's chief executive.

British car sales are highly seasonal. New registrations in April dropped to 176,820 from 464,824 in March, when a twice-yearly change in registration plates bolstered demand. Car sales for the first four months of 2014 are 12.5 percent higher than the same point in 2013 at 864,942.

Britain saw strong economic growth last year and wages have also caught up with inflation for the first time in nearly four years, emboldening consumers to buy big-ticket items.

Cheap credit and competitive finance deals have buoyed the sector, analysts said, with record low interest rates not expected to rise until the first half of next year.

"As long as we have low interest rates it is likely that car finance deals will remain appealing for those consumers considering buying a new car," said Chris Sutton, managing director at motor finance provider Black Horse, part of Lloyds Banking Group.

The best-selling vehicles in April were Ford's Fiesta supermini and mid-sized Focus, followed by Volkswagen's mid-sized Golf and General Motors's Vauxhall Corsa supermini, the SMMT said. (Reporting by Ana Nicolaci da Costa; Editing by Jeremy Gaunt)

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