RAC Cars News


Fall in UK car sales reported

By raccars Published

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New car registrations in the UK were down by 1.1 per cent last month, breaking a 43 month period of growth.

New figures from the Society of Motor Manufacturers and Traders (SMMT) show that the number of new cars registered nationally last month was just under 178,000, marking the first time in over three and a half years that sales have contracted.

So far in 2015 the market has grown by 6.4 per cent, although there is speculation that analysts will now have to revise year end forecasts to reflect the fact that demand for new vehicles appears to have diminished. And the figures show that this is impacting many of the major manufacturers, whilst simultaneously revealing growing demand for hybrid and electric vehicles.

The 1.1 per cent decrease has generated a lot of discussion as to whether this is a temporary state of affairs. And in the report the SMMT notes that this is probably a sign of the market stabilising after 43 months of strong growth spurred on by the economic recovery of the UK after the 2008 credit crunch. New car sales still exceed levels seen prior to 2008 and while record levels of growth may have abated, the outlook is seen as optimistic by some experts.

Petrol, diesel and alternative fuel car sales

The figures not only cover the total number of new vehicles registered last month, but also the types of power trains utilised by the cars that British motorists are buying. And while demand for both petrol and diesel vehicles remained relatively unchanged, enabling each to hold onto their expected share of the market, it was alternatively fuelled vehicles (AFVs) which truly exhibited an increase in popularity.

AFV sales were up by 13.8 per cent during October when compared with the same period in 2014. This means that three per cent of all cars sold last month do not rely solely on traditional fuel sources. The SMMT points out that this is, in part, as a result of the wider variety of AFVs that now are available in the UK, in addition to the increased awareness of the benefits that they offer.

The economic conditions in the UK at the moment appear to be benefiting affluent motorists the most, with the figures showing that there was a 23.1 per cent increase in luxury saloon sales as well as a 59 per cent rise in the number of specialist sports cars registered. This certainly adds weight to the idea that the market is still buoyant in spite of the slight shrinkage experienced in October.

Official statements

SMMT spokesperson Mike Hawes provided some context for the figures, pointing out that 2015 has been the strongest post-recession year for car sales in the UK to date. He also indicated that analysts have long been anticipating a time at which growth in demand would plateau, while noting that there are various conditions which make the current market favourable for new car buyers.

In particular the fact that interest rates remain low is being seen as a key reason why new car sales are remaining strong, while overall consumer confidence is helping to convince more people to pick up a new car rather than holding onto their current model or focusing solely on the used market for prospective purchases.

Hawes went on to assert that his organisation will not be lowering its expectations for full-year growth in new car sales in the wake of October’s figures. And as expected, the Ford Fiesta is still the UK’s biggest selling car, with over 8,500 registered last month, bringing the total in 2015 so far to more than 116,000.

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