Belt- tightening dents private vehicles sales
NEW car sales hit their highest April level for 13 years, but a reverse in private registrations has stoked fears that Britain’s economy is running on empty.
Concerns that consumer belt- tightening is spreading beyond retail spending increased as private car sales dipped 2.5 per cent last month to 83,793 from a year ago.
The decline was offset by growth in fl eet and business sales which boosted overall growth in registrations by 2 per cent to 189,505, the best April performance since 2003 according to the Society of Motor Manufacturers and Traders.
New vehicle sales are up 4.4 per cent so far this year after a bumper March in which over 518,000 cars were registered – the second biggest month on record.
SMMT chief executive Mike Hawes said: “After such a strong March, April’s steadier performance was to be anticipated, and is in line with our expectations for the year.
“Consumer confidence remains high as buyers continue to capitalise on attractive fi nance deals, although this could be affected by political and economic uncertainty in the coming months.”
EU referendum uncertainty has been blamed for businesses putting off investments as manufacturing and construction activity has fallen to three- year lows. The powerhouse services sector is also growing at its slowest since 2013 and figures this week from accountants BDO showed April high street sales were at their lowest since November 2008. Economists predict GDP growth will slow to 0.1 per cent in the second quarter from 0.4 per cent the previous three months.
Samuel Tombs at Pantheon Macroeconomics, warned: “Car sales are reaching a plateau, now that pent- up demand from households unable to replace their cars during the recession has been satisfied. Key drivers of the recovery in car sales are also weakening. Unsecured borrowing costs are not declining as rapidly as in 2015, while consumer confidence has deteriorated.
“Car sales only account for 5 per cent of consumer spending, but they often act as a bellwether. The fi gures add to the evidence indicating that the consumer recovery has lost momentum.”