‘Feel good factor’ leads to car sales rise
● Despite modest gains in July, sales remain down 5.5% in the year to date
Sales of new cars have gained ground despite demand for diesels falling for the 16 th consecutive month.
Industry leaders pointed to a “feel-good factor” last month among buyers as it emerged that 163,898 new cars were registered in July, up 1.2 per cent on the same month last year.
However, the latest figures from the Society of Motor Manufacturers and Traders (SM MT) also showed that registrations are down 5.5 per cent this year compared with the first seven months of 2017.
The SM MT said this was “broadly in line with expectations as demand begins to level out”.
Sales of petrol models increased by 20.1 per cent last month, while diesels fell for the 16th consecutive month, sliding 24.4 per cent.
Demand for alternatively fuelled vehicles (AFVS) such as hybrids and pure electrics increased by 21 percent to take a market share of 6.5 per cent. In Scotland, overall new car sales rose 8.2 per cent last month, year-on-year.
SMMT chief executive Mike Hawes said :“The feel-good factor from a sun and spor tpacked July, combined with some fantastic deals on a raft of exciting new models, clearly helped keep show rooms relatively busy last month.
“It’ s great to see alter natively fuelled vehicles bene - fiting from this growth, and government’s acknowledgement of the vital role new-tech diesel will play in its Road to Zero strategy should help even more motorists benefit from the latest, safest and low emission technology over the coming months.”
Howard Archer, chief eco - nomic advisor to the EY Item Club think-tank, warned that despite recent gains in new car sales, the coming months look likely to be“relatively challenging” for the sector.
He said :“Private new car sales edged up 0.1 percent year-on-year in July to 67,772 units. This followed a marginal drop of 0.6 per cent year-onyear in June and gains of 10.1 per cent year-on-year in May and 24.3 per cent year-on-year in April.
“There was likely to have been a boost in May/ April from sales of new re gist ration year cars being delayed from March due to the severe weather. Indeed, private new car sales had plunged 16.5 per cent year- on-year in March, completing a first quarter of declines.
“Private new car sales were down 4.4 percent year-onyear over the first seven months of 2018 at 654,976 units, indicating that consum er shave been cautious over making major purchases as the extended squeeze on their purchasing power only gradually eases.”
Alex Buttle, director at car buying comparison website Motorway.co.uk, said: “While it’s encouraging that AFV sales have hit record levels, diesel sales have plummeted faster than perhaps anyone expected.
“Without a new catalyst for resurrection planned by the industry or government, and the major manufacturers focused on their plans for electric and hybrid development, has diesel’s fate been sealed?
“There’s only one direction diesel sales are going sadly and that’s downwards. Diesel’s fall from grace has been dramatic, and the car industry’s past efforts to promote the benefits of Euro 6 diesel cars have not borne fruit.”