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New car registrations jump 10% in April but trend remains down
Britain's new car market grew 10.4% throughout the month of April, as 167,911 new units were registered on UK roads, according to figures released today by the industry.
Figures were mainly boosted because of a soft comparable period last year when vehicle excise duty changes came into force last April, as well as the timing of Easter, which meant two additional selling days this April.
The government also tinkered with VED this April, increasing it by one band for all new diesel cars, but the sums involved are much smaller than last year.
Last month's figures painted a "mixed picture", according to the Society of Motor Manufacturers and Traders, with private demand growing 26.3%, while the fleet market remained stable at 0.9% and business registrations declined 12.9% year-on-year.
Overall, the new car market is down 8.8% during the first four months of 2018.
Demand for supermini and dual-purpose cars saw the most significant growth of all segments, up 27.0% and 26.8% respectively.
Demand for petrol cars grew 38.5% in April, while diesel registrations continued the recent trend, declining 24.9%.
Meanwhile, registrations of plug-in and hybrid electric cars remained on an upward path, up 49.3%, thanks to manufacturer investment in a growing choice of models.
"While the growth is welcome, these alternatively fuelled vehicles still account for just 5.6% of the market," the SMMT said.
Despite the significant rise in the month, the overall new car market remained down for the year as a whole, with new registrations in the first four months falling 8.8%, year-on-year to 886,400 units.
The SMMT pointed out that demand was affected by several other factors, including adverse weather conditions experienced throughout March, which pushed some deliveries into April, as well as the vehicle excise duty changes that came into force last April.
Mike Hawes, SMMT's chief executive, said, "It's important not to look at one month in isolation and, given the major disruption to last April's market caused by sweeping VED changes, this increase is not unexpected. While the continuing growth in demand for plug-in and hybrid cars is positive news, the market share of these vehicles remains low and will do little to offset damaging declines elsewhere."
Greg Lawless, a consumer equity research analyst at Shore Capital, the most significant factor was the soft comparatives that the sector was last year from VED changes.
"Despite the spike in April registrations, the new car market remained down 8.8% during the first four months of 2018. That said, the rate of decline is expected to slow over the course of 2018, given the softer comparatives that the market is now cycling," he added.
Pantheon Macroeconomics said its seasonally adjusted measure of the SMMT's private registrations data rose by 3.4% month-to-month in April, but was 1.5% below its Q1 average, "signalling that car sales remain on a downward trend".
The economists said the recent renewed decline in consumers' confidence such as shown by the GfK index falling to its lowest level since July 2016, bodes ill for sales over the next six months.
"And with consumers taking a much more cautious attitude towards debt-net consumer credit was the lowest since November 2012 in March, due to a rise in repayments-more households likely will keep their cars after their Personal Contract Plan deals come to an end, rather than take on more debt to trade them in for the latest model. Accordingly, it would be premature to conclude that the new car market is on a path to recovery yet."