9:20 am, May 4, 2017
THE UK new car market experienced a significant decline in April, following exceptional growth the previous month.
Figures published by the SMMT today show that 152,076 new cars were registered in April, a 19.8 per cent decline.
Demand was down across the board, with registrations by private buyers, businesses and large fleets falling 28.4 per cent, 21.0 per cent and 12.3 per cent respectively. Petrol, diesel and alternatively-fuelled vehicle registrations also declined, with AFV demand down for the first time in 47 months, albeit by a marginal 1.3 per cent.
Despite the substantial falls in the month, the overall new car market remains strong in the year to date, with new registrations in the first four months up 1.1 per cent year-on-year to 972,092 – the highest level on record.
Mike Hawes, SMMT chief executive, pictured, said: ‘With the rush to register new cars and avoid VED tax rises before the end of March, as well as fewer selling days due to the later Easter, April was always going to be much slower.
‘It’s important to note that the market remains at record levels as customers still see many benefits in purchasing a new car. We therefore expect demand to stabilise over the year as the turbulence created by these tax changes decreases.’
Chris Bosworth, director of strategy at Close Brothers Motor Finance, said: ‘The record-breaking golden period for new car registrations always had to come to an end at some point, and given the highly volatile economic climate, it’s not surprising today’s figures show a decrease in demand.
‘We expect the turbulent political landscape, rising inflation and its impact on consumer spending will also hinder new car growth in the months ahead.’
Julian Rance, director at Paragon Car Finance, agreed with Hawes and said: ‘While there has been a drop in the latest year-on-year sales figures, it should be remembered that much of this can be accounted for by car sales being inflated in March by consumers looking to beat the Vehicle Excise Duty deadline. Furthermore, April was a short month, and, with the Easter holidays, only had 18 working days.’
However, car finance expert at the National Association of Commercial Finance Brokers (NACFB) Graham Hill was surprised by the amount car sales dropped.
He said: ‘A decline in new car registrations in April was expected after the Chancellor’s surprise move away from encouraging low emission cars, but it wasn’t meant to be this sharp.
‘The biggest area of decline was private registrations, down by 28.4 per cent. Now while private buyers are without doubt sensitive to things like changes in Vehicle Excise Duty, this in itself doesn’t explain the massive fall in new car registrations.
‘I suspect a growing tide of adverse press around Personal Contract Purchase (PCP), culminating in the announcement that the FCA is to investigate potential mis-selling of vehicle finance, may also have been a contributing factor.
‘While much of the adverse press is mis-placed, and PCPs remain a viable option for many car owners, the resulting uncertainty has doubtless influenced the nosedive in new car registrations.’
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