UK car registrations down, but decline slows

Figures released by the Society of Motor Manufacturers and Traders (SMMT) today show that the UK new car market has declined for a third consecutive month. A total of 243,454 new cars were registered in June, and while this figure represents a decline, registrations fell at a slower pace than in the previous two months, by 4.8 per cent, as demand continued to stabilise following a record first quarter and the subsequent market turbulence caused by the recent changes to Vehicle Excise Duty. The SMMT adds that the market is now “more in line” with 2017 forecasts.

Demand in the month was down across private, fleet and business registrations, which respectively fell by 7.8 per cent, 2.4 per cent and 8.3 per cent. Meanwhile, the alternative fuel vehicle (AFV) sector enjoyed notable growth, with demand rising 29.0 per cent to 10,721 units to maintain a record 4.4 per cent market share for a second month. Petrol registrations rose by 2.5 per cent and registrations of diesels fell 14.7 per cent.

Compact cars, typically powered by smaller petrol engines, proved most popular for all buyers, with superminis and small family cars accounting for almost 60 per cent of the market. Small family cars and SUVs were the only two segments to register growth in June, up 6.0 per cent and 11.3 per cent, respectively.

Year-to-date, overall performance remains strong, falling by 1.3 per cent to 1,401,811 units and putting the market on track to meet 2017 forecasts. Fleet and business buyers drove demand across the first six months with registrations up 1.5 per cent and 2.7 per cent respectively in contrast to a 4.8 per cent drop in private purchases, although almost 650,000 consumers have chosen a new car this year.

“As forecast, demand for new cars has started to cool following five consecutive years of solid growth but the numbers are still strong and the first half of the year is the second biggest on record,” said SMMT chief executive Mike Hawes. “Provided consumer and business confidence holds, we expect demand to remain at a similarly high level over the coming months. It’s encouraging to see alternatively fuelled vehicles experiencing rapid growth but adoption is still at a relatively low level and more long-term incentives are required if this new generation of vehicles is to be a more common sight on British roads.”