Commenting on the latest car registration figures from the Society of Motor Manufacturers and Traders
It was always going to be a tough challenge for the UK new car market to maintain its run of comparative monthly growth, despite the strong start to the year.
4 June 2015
Commenting on the latest car registration figures from the Society of Motor Manufacturers and Traders, which show a 2.4% increase to 198,706 units compared with May 2014, David Raistrick, UK Automotive Leader at Deloitte said:
“It was always going to be a tough challenge for the UK new car market to maintain its run of comparative monthly growth, despite the strong start to the year. It is quite an achievement to have stretched the success story to a 39th consecutive month. The relatively positive UK economic picture is clearly supporting this key UK market.
“The growth in fleet sales has been key to the UK new car market maintaining this upward trend, as there has been a distinct slowing in the increase in private sales, compared to 2014. May’s results showed that the increase in new cars sold to private buyers over the first five months rose by only c6,600, compared to a rise of c57,700 for the first five months of last year. Yet growth in fleet sales has increased from 40,000 cars to 58,000 cars in the same period.
“This could be the first real indication that the consumer led growth, which kick-started the UK new car market nearly three years ago, is levelling off and is not sustainable. With the UK car parc standing at around 32.6 million cars on the road, this represents over one car for every two people. This figure suggests that there is little prospect of the UK car parc increasing significantly enough to allow for the continued rate of growth in new car sales, whilst also supporting the used car market and underpinning residual values.
“Recent car production data also highlighted that whilst production for the year has passed 500,000 cars, this is actually down 1.4 per cent on the same period last year. Manufacturers were relying on supply in the UK car market to make up for a 7 per cent drop in vehicles for export
“The rate of growth in the sales of alternative fuelled vehicles may be under threat too, as the Office for Low Emission Vehicles is currently reviewing the plug-in car grant. This currently contributes £5,000 towards the purchase of electric vehicles and whilst the overall sales in the grant eligible vehicles since 2011 is relatively small, a third of them have been registered in the first five months of 2015. Should the level of grant be changed, or removed, buyers may be tempted back to the traditionally fuelled alternatives, as fuel efficiency continues to improve across both petrol and diesel fuelled cars.”
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
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The information contained in this press release is correct at the time of going to press.
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