New car market ‘cooling’
UK new car registrations experienced a moderate increase in July, up 0.1% for the month, according to figures released by SMMT.
New car registrations so far this year stand at 1,599,159, putting demand in the year-to-date 2.8% higher than for the same period in 2015 following a strong first quarter.
July followed the trend seen throughout this year whereby lower private registrations were offset by fleet purchases, which increased by 5% this month. Demand for alternatively fueled vehicles remained remarkably strong with 24.7% more registrations compared with the same month in 2015.
Mike Hawes, SMMT chief executive, said, ‘After a healthy start to 2016 and record registrations in 2015 the market is showing signs of cooling. 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. With low interest rates, attractive finance options and exciting new models coming to the showrooms, the market still has lots to offer customers.’
Commenting on the figures, Chris Bosworth, director of strategy at Close Brothers Motor Finance, said, ‘One potential side effect from any cool-down in the new vehicles market, however, is a shift by consumers towards the used car sector. According to figures from the FLA, the used car market in the UK already grew by 15% year-on-year during the first quarter of 2016, and our own data suggests that July was a strong month for used car dealers.’