Further road bumps for car industry

BRITAIN’S car industry is braced for further upheaval as experts predict even steeper declines in 2018.

New car registrations data due to be published on Friday is expected to show sales fell 5pc in 2017 to 2.56m cars, amid growing uncertainty about the health of the economy, confusion over the Government’s stance on diesel cars, and higher vehicle taxes. The Society of Motor Manufacturers and Traders (SMMT) trade body cut sales forecasts three times in 2017.

It is now predicting a 5.4pc annual fall in 2018 to 2.43m new registrations, and a further slip in 2019 to 2.39m.

The decline comes after the UK’S £77.5bn-a-year car market posted a fifth successive year of growth in 2016.

Some industry commentators expect bigger falls in a market heavily reliant on loans. “Put simply, the UK market is overtrading,” said Professor David Bailey, an automotive industry expert at Aston University.

“There’s a big question over how long car buying fuelled by personal contract plans (PCPS) can go.”

PCPS – a form of leasing – drove car buying after the financial crisis and the vast majority of new cars are now bought using this method.