New car registrations: June

Demand for new cars slowed in June, with registrations dropping by 6.1% to 209,190 units.

Year-to-date registrations were also down by 1.6% to 1,247,479 units.

Paul Everitt, Society of Motor Manufacturers and Traders chief executive, said: "We are now seeing concerns about rising fuel bills and household costs dampening consumer confidence, leading to slower demand for new cars.

“This slow- down is not unexpected, but signals an increasingly tough retail environment.”

The SMMT is now considering the latest figures and will review its forecast for full year registrations this month.

The fleet sector was the only one to maintain growth in June and now accounts for over half the market in the first half of the year, following 2% growth.

Both private and business demand has shown similar rates of decline over the past six months. Private demand fell by 7.9% in quarter two and the weakening position reflects growing concerns about the health of consumer spending.

Vauxhall took the top two slots of the best sellers’ list in June for the first time since February 2000. The Corsa was the best selling model for the first time since September 2004, although Ford’s Focus remained the best seller over the first six months of 2008.

In fifth position BMW’s 3 Series recorded its best placing of the year. BMW has seen the largest volume rise of 2008. Kia, Nissan, smart and Volvo are amongst others also recording strong gains.

Everitt said: "Cost pressures, environmental concerns and technological advances have ensured consumers have taken the choice of buying more efficient vehicles, and record numbers of cars are now in the lowest CO2 VED bands.

“The share of cars in the A band has increased more than tenfold in the past year."

While the overall market has fallen, diesel registrations have continued to improve. Diesel is now noticeably more expensive than petrol at the pumps, but better fuel efficiency and lower tax rates (due to lower CO2 emissions) has sustained growing demand. The BMW 3 Series was June’s top selling diesel.

Demand for alternatively fuelled vehicles (AFV) declined for a second successive month in June, down 6.7% to 1,444 units.

Robinson, director of the RMI national franchised dealers association (NFDA), said: "Uncertainty over the rising cost of motoring, along with higher overall living costs, have made consumers more cautious about buying a new car, but this could be eased if Government clarified its intentions towards the motorist." Robinson believes changes to the way that Vehicle Excise Duty (VED) is calculated, along with rising fuel costs and economic and environmental concerns have led to consumers taking a wait-and-see stance. She said: "Confusion over VED changes due to come into force next year mean that it is more difficult to calculate how much motoring is going to cost. In combination with rising household costs, this means that many consumers will wait to see how the cost of motoring and the overall economy plays out over the next few months.

"Reductions in interest rates, efforts to stabilize fuel costs, and clarification over the future cost of motoring are all within the Government's remit, and we urge them to look into these areas urgently."

To download the full June manufacturer registration figures from the SMMT’s data click here.

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