Sales slowdown – stability or Brexit fears?

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Renault dealership amid sales slowdown

Car registrations in the UK grew 2.5 per cent in May, suggesting that the new car sales market has levelled out after strong growth in 2015.

A levelling off was forecast by industry observers at the beginning of the year, but some believe the cause could be uncertainty created by the forthcoming EU referendum.

The May figures, issued by the Society of Motor Manufacturers & Traders (SMMT), follow a two per cent rise in April, reining back from an opening quarter of 2016 that saw a surge in sales averaging more than eight per cent over the period.

Best May results since 2002

In total 203,585 vehicles were registered in May, the highest total for the month since 2002. And as in April, it is the fleet sector that is currently driving the market, up 8.8 per cent and counteracting a three per cent drop in registrations to private customers.

Diesel-powered cars also made a bit of a comeback, registrations up five per cent compared to a 0.6 per cent slide in petrol registrations. And 5.632 alternative-fuel powered vehicles were registered in May, 607 more than in the same month in 2015.

Slowdown in growth continues

Year to date 1,164,870 cars have now been registered which is 4.1 per cent ahead of the same period last year.

But the SMMT points to a second month of growth under three per cent as showing that the market is becoming potentially more stable following a record 2015, while adding that the fall off could be to uncertainty stoked by the EU referendum.

Despite a sales slowdown new registrations now compare with a peak seen in 2002. Chart: SMMT

Despite a slowdown new registrations now compare with a peak seen in 2002. Chart: SMMT

“The new car market in May remained high with compelling offers available on the latest vehicles, but the low growth is further evidence of the market cooling in the face of concerns around economic and political stability,” says SMMT Chief Executive Mike Hawes.

“Whether this is the result of some buyers holding off until the current uncertainty is resolved or a sign of a more stable market for new cars remains to be seen,” he adds.

Familiar faces occupying the top ten positions

The new car top ten has a familiar look about it. The top three are unchanged, with the Ford Fiesta continuing to dominate ahead of the VW Golf and Ford Focus. Vauxhall’s Corsa has recovered to fourth, demoting the Nissan Qashqai by a place, followed by the Vauxhall Astra, VW Polo, MINI and the fleet market’s two major players, the Mercedes-Benz C-Class and BMW 3 Series.

Andrew Charman

Andrew is the News and Road Test Editor for The Car Expert. He is a member of the Guild of Motoring Writers, and has been testing and writing about new cars for more than 20 years. Today he is well known to senior personnel at the major car manufacturers and attends many new model launches each year.

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