Post-Brexit jitters impact new car market

POST-Brexit jitters have filtered through to the previously buoyant UK new car market, with registrations for July almost flat.

The car industry, one of the main drivers of the UK’s economic growth in recent years, saw an increase in new registrations of just 0.1% last month.

While July is normally a quiet month, the figures appear to correlate with fears that consumers are delaying big purchases until the economic picture is clearer.

According to latest figures from the Society of Motor Manufacturers and Traders (SMMT), 178,523 new vehicles were registered last month compared with 178,420 in July last year.

The trade body put a positive spin on the figures, adding that the 1,599,159 new cars registered in the year-to-date is 2.8% higher than for the same period in 2015. However, this figure is mainly due to a very strong first half.

The SMMT also said that lower private registrations were partially offset by fleet purchases, which increased by 5.0% in July.

Mike Hawes, SMMT chief executive, said: “After a healthy start to 2016 and record registrations in 2015 the market is showing signs of cooling.

“The automotive market is a vital part of the British economy and its important government delivers the economic conditions which instill business and consumer confidence.”

Trying to maintain an upbeat message, he added that low interest rates, attractive finance options and new model launches suggested the market still had lots to offer consumers.

Commenting Chris Bosworth, director of strategy at Close Brothers Motor Finance, said the results showed a continuation of the slowdown in the growth trajectory of the new car market which began to emerge during the second quarter.

“The total figure also continues to disguise the increasing difference between the performance of the private sales market (where for the fourth month in a row sales have fallen year-on-year) and the fleet market where growth continues to be seen.

“It is probably still too early to gauge the effect that Brexit is having on the market as most of the cars sold in July will have been ordered prior to the vote so this may provide an additional headwind across the market in August.”

Carlos Ghosn, chief executive of Renault-Nissan has only served to stir things up even more by saying that investment plans in its massive Sunderland plant – into which many West Midland component manufacturers supply – are now on hold until post-Brexit trade deals become clearer.