UK new car registrations showed a moderate increase in July, up 0.1% to 178,523 units as demand continues to cool.
A rise in fleet demand propped up the rest of the market. Fleet registrations increased by 5% to 99,124 units while the private market fell by 6.1% year-on-year to 72,727 units.
Year-to-date figures show slight growth in the private market with registrations up 1.1% to 721,991 units and fleet registrations up 4.7% to 816,607 units.
According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT) 1,599,159 new cars have been registered so far this year, putting demand in the year-to-date 2.8% higher than for the same period in 2015 following a strong plate-change performance in Q1.
Mike Hawes, SMMT chief executive, said: “After a healthy start to 2016 and record registrations in 2015 the market is showing signs of cooling.
“The automotive market is a vital part of the British economy and it’s important Government delivers the economic conditions which instil business and consumer confidence. With low interest rates, attractive finance options and exciting new models coming to the showrooms, the market still has lots to offer customers.”
Sue Robinson, director of National Franchised Dealers Association (NFDA), said: “These figures confirm that overall retail sales are going through a stabilisation period following a positive second quarter.
“It is positive to see that alternative fuel vehicles sales remained strong up 24.7% in July, prompted by various benefits including low running costs, lower rates of Vehicle Excise Duty and financial support offered by the Government.
“Many dealers have experienced an improvement on retail demand in July compared to the immediate post Brexit situation. The UK remains a large market for the EU and performance for the year ahead is expected to be in line with market expectations.”
Richard Jones, Black Horse managing director, said: "July’s figures show resilience for the industry against a backdrop of challenging economic conditions.
"Ongoing uncertainty doesn’t seem to have impacted new car sales, but I would expect that the remainder of 2016 will bring further challenges and we might well see this reflected in more modest sales figures later in the year.”
Chris Bosworth, director of strategy at Close Brothers Motor Finance, said: “Today’s results show a continuation of the slowdown in the growth trajectory of the UK new car market which we saw emerge over the second quarter.
"The total figure also continues to disguise the increasing difference between the performance of the private sales market (where for the fourth month in a row sales have fallen year-on-year) and the fleet market where growth continues to be seen. It is probably still too early to gauge the effect that Brexit is having on the market as most of the cars sold in July will have been ordered prior to the vote so this may provide an additional headwind across the market in August.”
Bosworth said one potential side effect from any cool-down in the new vehicle market would be a shift by consumers towards the used car sector.
According to figures from the FLA, the used car market in the UK already grew by 15% year on year during the first quarter of 2016, and Close Brothers' own data suggests that July was a strong month for used car dealers.
He said: "This is a similar trend to that which emerged in the immediate aftermath of the financial crash, where the used car market was boosted at the expense of the new car market. With car production in the UK having sustained somewhat of a golden period in recent years, supply of used vehicles is catching up with demand. This could lead prices to fall, and we could well see consumers opting for well-priced ‘nearly-new’ stock."
|Land Rover||73%||4,882 units|
UK July 2016 biggest fallers - cars
*Registrations for Citroen and DS were combined as Citroen until May 2015. As the Citroen figures for year-to-date 2015 include Citroen and DS registrations, the need to be combined with the 2015 registrations for Citroen and DS when comparing year-on-year results.
SMMT data for UK best sellers July 2016
SMMT data UK July 2016 market split