THE UK new car market declined in May, with demand falling by 8.5 per cent, according to figures released today by SMMT.
A total of 186,265 new cars were registered in the month, with business purchases driving the market, up 20.1 per cent, to offset declines from private and fleet buyers.
Although it dipped slightly in the previous month, the market for alternatively fuelled vehicles (AFVs) bounced back in May to continue the upward trend seen in the first quarter and take a new record market share of 4.4 per cent.
More than 8,000 AFVs were registered in the month, representing an increase of 46.7 per cent. Almost 50,000 new AFVs have joined Britain’s roads so far this year.
Despite a dip of 0.6 per cent in overall registrations since January, more than 1.1 million new cars have been registered on UK roads so far in 2017. Business and fleet sectors have driven demand, up 5.3 per cent and 2.4 per cent respectively to offset a decline from private buyers of 4.2 per cent.
However, more than half a million new cars have been registered by private buyers since the start of the year.
Mike Hawes, SMMT chief executive, said: ‘We expected demand in the new car market to remain negative in May due to the pull-forward to March – which was an all-time record month – resulting from VED reform.
‘Added to this, the general election was always likely to give many pause for thought and affect purchasing patterns in the short term.
Although demand has fallen, it’s important to remember that the market remains at a very high level and, with a raft of new models packed with the latest low emission and connected technology coming to market this summer, we expect the market to remain strong over the year.’
Chris Bosworth, director of strategy at Close Brothers Motor Finance, said: ‘The new car market is experiencing a turbulent time. The unsettled political landscape and rising inflation has impacted consumer spending, and the recent new vehicle tax rate is certainly impacting new car growth. Following the general election and as we enter the Brexit discussions it’s likely we’ll continue to see this pattern continue.’
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