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New car market achieves second-best H1, despite continued decline

Mike Hawes

A third consecutive month of falling new car sales was registered by the SMMT during June but the market finishes H1 with its second biggest registrations total ever.

Registrations were down 4.8% at 243,454 but SMMT chief executive Mike Hawes insisted that “the numbers are still strong and the first half of the year is the second biggest on record” following the publication of last’s months results this morning.

The slowdown in registrations was less than in the previous two months and the SMMT claimed that this indicated demand was continuing to stabilise following a record first quarter and the subsequent market turbulence caused by the recent changes to Vehicle Excise Duty.

Diesel-engined vehicles continued their decline in popularity, however, with a 14.7% decline in June.

Hawes said: “As forecast, demand for new cars has started to cool following five consecutive years of solid growth but the numbers are still strong and the first half of the year is the second biggest on record.

“Provided consumer and business confidence holds, we expect demand to remain at a similarly high level over the coming months.”

Year-to-date, overall performance remains strong, falling slightly by 1.3% to 1,401,811 units and putting the market on track to meet 2017 forecasts.

Fleet and business buyers drove demand across the first six months with registrations up 1.5% and 2.7% respectively in contrast to a -4.8% drop in private purchases, although almost 650,000 consumers have chosen a new car this year.

Demand in the June was down across private, fleet and business registrations, recording falls of 7.8%, 2.4% and 8.3%, respectively.

The AFV sector enjoyed notable growth, however, with demand rising 29% to 10,721 units to maintain a record 4.4% market share for a second month as petrol registrations rose by 2.5% and diesel fell foul of its recent bad press.

Hawes said: “It’s encouraging to see alternatively fuelled vehicles experiencing rapid growth but adoption is still at a relatively low level and more long term incentives are required if this new generation of vehicles is to be a more common sight on British roads.”

Compact cars proved most popular for all buyers, with superminis and small family cars accounting for almost 60% of the market.

Small family cars and SUVs were the only two segments to register growth in June, up 6.0% and 11.3% respectively.

NFDA director, Sue Robinson, said that the new car registration figures for June “demonstrate the stability of the UK new car market”.

She added: “The decrease in diesel registrations shows that there is some confusion surrounding diesel. Modern Euro 6 diesel cars should not be compared to older diesel vehicles.

“It is encouraging to see that more consumers seem to be shifting towards alternative fuel vehicles, which retain a record market share. This is particularly positive as NFDA members remain in the best place to service this burgeoning sector”.

> New car sales figures 

> New car sales per franchised dealer

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