New car registrations fell by 3.5% to 131,634 units in July as a result of slower economic growth and subdued consumer confidence.

New car registrations have fallen consecutively over the past 13 months. The 3.5% fall in registrations in July was broadly in line with expectations, given the challenging economic climate. The pace of decline was less than falls recorded earlier in the year, as expected given the subsiding effect of the scrappage scheme.

According to figures from the Society of Motor Manufacturers and Traders, said fleet purchases supported the market once again and were up 2.1% in July and by 3.3% year-to-date.

The SMMT said the market remains on track to meet its full year forecast of 1.93 million units.

Paul Everitt, SMMT chief executive, said: “Robust demand in the fleet sector helped to bolster weaker private demand.

 

“While the coming months remain challenging, performance in the second half of 2011 is expected to keep the market on course to reach around 1.93 million units.”


Sue Robinson, director of the RMI National Franchised Dealers Association, said: "The 13th consecutive decline in the retail market proves that there is still a lack of consumer confidence.

"Rising household bills and declining disposable incomes are making consumers cautious about committing to big ticket items such as cars.

“The market is highly competitive at the moment with the best deals being sought out by the consumer. Consumers are willing to buy if the price is right so there is a need for marketing and incentives that are attractive to the buyer. Also consumers need to be educated that a newer car may be cheaper due to better fuel economy and cheaper maintenance costs.”

Private new car registrations fell by 9.2% in July and have fallen by 17.3% or over 100,000 units over the first seven months of the year. The impact of the scrappage scheme predominantly influenced private volumes. The sluggish nature of economic recovery, high inflation and modest wage growth are acting as dampeners to consumer confidence.

Diesel registrations were just 53 units shy of last July’s level and over the year-to-date have grown by over 35,000 units to account for 50.2% of the overall market and 52.4% of the July market, up from 44% and 50.6% respectively a year ago. Vauxhall’s Insignia was the top selling diesel in July, just ahead of the year-to-date best selling VW Golf.

The Ford Fiesta was the best selling model in the overall new car market in both July and the year-to-date. The supermini segment accounted for an improved 34.2% share of the July market in 2011, but only the mini and executive segments posted growth in the month.