Growth in new UK car sales slows in July – The Guardian

Posted: Thursday, August 04, 2016

Further signs that the Brexit vote is depressing consumer confidence have arrived with a brake applied to previously booming car sales.

After a record 2015 and a strong first half of the year, new vehicle registrations rose by just 0.1% in July, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

Industry analysts said uncertainty created by the referendum outcome was one of a number of factors behind a slowdown that will send tremors through Britain’s large and growing car production sector.

“After a healthy start to 2016 and record registrations in 2015, the market is showing signs of cooling,” said Mike Hawes, the SMMT’s chief executive.

“The automotive market is a vital part of the British economy and it’s important government delivers the economic conditions which instil business and consumer confidence.”

A total of 1,599,159 new cars have been registered so far this year, putting demand 2.8% higher than for the same period in 2015 following a strong first quarter.

A total of 178,523 cars were sold last month, evenly split between petrol and diesel models. The Ford Fiesta was the bestselling car, followed by the Vauxhall Corsa and Astra. More than 2.6m cars were sold last year.

Mark Fulthorpe, a car market analyst with IHS Markit, said consumers had been spending much more than normal over recent years fuelled in part by one-off factors such as PPI insurance payouts.

“There was an expectation that the pace established was likely to ease anyway, but has Brexit accelerated that process? That is how we interpret it,” he said.

Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, agreed: “Uncertainty about the economic outlook is making consumers cautious to purchase big-ticket discretionary items,” he said.

Hawes, however, said he was still confident that car buyers could be tempted: “With low interest rates, attractive finance options and exciting new models coming to the showrooms, the market still has lots to offer customers.”

In some respects the SMMT figures for July followed a 2016 trend with lower private registrations offset by fleet purchases, which rose by 5%.

Demand for alternatively fuelled vehicles remained strong, with a quarter more registrations compared with the same month in 2015.


Write a Reply or Comment:

Your email address will not be published.*