We’ve hit ‘peak car’ says biggest motor dealer in Britain

BRITAIN has reached ‘peak’ car, according to the boss of the UK’s biggest motor dealer.

Pendragon chief executive Trevor Finn said so many people own a vehicle that the market for new cars cannot get any bigger.

He said this was the biggest factor in the industry’s recent decline rather than Brexit uncertainty or fears of swingeing penalties on drivers of polluting diesels.

He believes manufacturers are also building too many cars and have failed to adjust to the fall in demand. This is pushing down the price of both new and used cars.

Pendragon owns the Evans Halshaw and Stratstone brands in the UK. It sells around a quarter of a million new and second hand cars each year. Speaking as the firm issued a profit warning, causing shares to plunge by around 18 per cent, Mr Finn said: ‘The car market has reached its peak from a growth point of view.

‘The number of new car buyers has probably reached its plateau. Demand has waned. There are 32million cars in use. This number has grown every year since the war. People are still attached to car ownership. But the reality is that with the advent of more affordable cars, people who want a car already have one.’

He added: ‘There is an oversupply of cars which is pushing down prices of new cars. This is having a knock-on effect on the value of second hand cars.’

Mr Finn said manufacturers will have to reduce the number of cars they build to match demand.

Figures from the Society of Motor Manufacturers and Traders show new car registrations have fallen for six months in a row, putting 2017 on course for the first annual decline in new car sales since 2011.

The SMMT blamed the Brexit vote for making people nervous about making ‘big ticket purchases’. It also said confusion about plans to curb air pollution had triggered a slump in sales of diesel cars.

But Mr Finn said neither Brexit nor the prospect of charges for diesels are to blame for the decline in car sales which has caused profits to fall at his firm in the three months to the end of September.