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Industry experts say sales increase is the market steadying

Time 11:45 am, August 6, 2018

INDUSTRY experts say the news that new car sales were up 1.2 per cent last month is just a long-awaited steadying.

July saw 163,898 new cars registered in the UK, with demand for alternatively fuelled vehicles (AFVs) going up by a fifth to hit record levels. However, the industry has been urged to remember that this is a stabilisation that has been expected for a long time.

Richard Jones, managing director of Black Horse, was pessimistic, saying: ‘While these figures show an increase on a monthly basis, the reality is that they simply reflect long-term steadying of new car sales. After much fluctuation over the past year, we’re seeing volumes return to a more sustainable level. That said, WLTP is likely to impact on the pattern of sales in the coming months.


‘The real story in these figures is the ongoing fall in the popularity of diesel, which is caused by the mistaken view that removing all diesel cars from the UK’s roads is the quickest way to reduce emissions. Rather, the most important issue today is the more general removal of older, more polluting cars whether petrol or diesel.’

Sean Kemple, director of sales at Close Brothers Motor Finance, painted a slightly more optimistic picture but still urged caution, saying: ‘After a turbulent first six months for the new car market, July’s positive results offer some respite for dealers. Record temperatures across the country led to a surge in demand for soft-top cars, and we’re still seeing a slow but steady increase in consumer interest in AFVs.

‘That said, more clarity is needed around government investment for charging points and the taxes paid on AFVs for consumer interest to translate to buying habits. Contrastingly, European diesel sales were at a 17-year low this month, and Brits are still uncertain about the government’s low-emission policies – this too needs to be addressed to bring stability to the market. It’s crucial that dealers keep a close eye on these issues and adjust the stock sitting on the forecourt accordingly.’

Ian Gilmartin, head of retail and wholesale at Barclays Corporate Banking, commented: ‘1.2 per cent doesn’t sound like a big increase, but the return to growth for the new car market in July is significant and will provide some much-needed reassurance to the industry.

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‘The fall posted in June will have ruffled a few feathers, so this immediate return to form should provide a real shot in the arm for the sector as we begin the run-in to September’s plate change.’

Ian Plummer, director at Auto Trader, added: ‘Manufacturers have been racing to clear stock before new regulations on fuel economy and emissions take effect in September, resulting in some great opportunities for consumers.

‘Sales in July were up 1.2 per cent compared with the same month last year. While this has slowed the overall decline, year-to-date sales are still down 5.5 per cent, and with the industry still facing unprecedented challenges, not least the uncertainties of Brexit, the outlook for the rest of 2018 is hard to predict.’

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