July 2016 saw a 5% rise in new cars registered to fleets and businesses, compared to the same month in 2015. This is in contrast to private registrations, which saw a 6% fall on July’s figures from last year.
Fleet and business purchases now represent the majority of the new car market, with the Society of Motor Manufacturers and Traders (SMMT) reporting that 105,796 new cars were registered to the sector in July. Private registrations, however, stalled at 72,727, accounting for only 41% of the market.
Figures for this year to date show total new car registrations across all sectors in the UK are up slightly on 2015, having increased by 2.8% to 1,599,159. However, the amount of these accounted for by fleet and business purchases has risen 4% on the same period last year, making up 55% of the total registrations this year to date with 877,168 units registered to commercial ventures.
SMMT Chief Executive Mike Hawes believes that following a strong start to 2016, the new car market is showing signs of slowing down. He said: “The automotive market is a vital part of the British economy and it’s important government delivers the economic conditions which instil business and consumer confidence. With low interest rates, attractive finance options and exciting new models coming to the showrooms, the market still has lots to offer customers.”
The impact of Brexit on the new car market is yet to be seen, with August’s figures likely to paint a clearer picture; as most of the new cars registered in July were ordered before the Referendum. However, the used car market has performed comparatively strongly this year so far, with sales in the first quarter up 15% on 2015’s figures for the same period.
Chris Bosworth, Director of Strategy at Close Brothers Motor Finance, explained: “With car production in the UK having sustained somewhat of a golden period in recent years, supply of used vehicles is catching up with demand. This could lead prices to fall, and we could well see consumers opting for well-priced ‘nearly new’ stock.”
One area of the new car market in which demand has increased significantly is electric and hybrid vehicles, with registrations up 24.7% in July compared to the same month in 2015. Some motivating factors prompting this increase are thought to be the much lower running costs of electric cars, lower rates of Vehicle Excise Duty and the government’s Plug-in Car Grant subsidy scheme for all new alternative fuel vehicles.