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Brexit dip dents car sales record half-year

Fiesta ST200 gravel
ST200 is expected to further boost sales of top-selling Fiesta

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7 July 2016

New registrations – the key points

  • June -0.8% decline on 2015
  • Demand for new cars up 3.2% in first half of 2016
  • Record 1,420,636 registrations between January and June.
  • Growth in all fuel types
  • Alternatively fuelled vehicles up 21.3% year to date.

A RECORD half-year for 2016 new car registrations ended with a small dip in June – sparking a warning on consumer confidence and exchange rates impact following the Brexit vote in the EU referendum.

Ford was once again the UK leader in total vehicle, car and commercial vehicle (CV) sales in June with its highest June CV and fleet car volume on record, according to the figures published by the SMMT.

And alternatively fuelled cars – principally hybrids – soared in popularity by a fifth against 2015.

John Leech, head of automotive for KPMG in the UK, commented: “UK new car sales were down 0.8% in June as consumer demand fell by 4.5%, although offset in part by a rise in fleet sales.

record half-year

“This is the third month that consumer demand has softened and there are many who feel that the top of the market has been reached following 2015’s all-time record sales. Falling consumer confidence since the EU referendum is likely to further reduce sales in the coming months.

“Manufacturers are evaluating their positions carefully – although the industry is in good health and able to support the market, the decline in sterling is widely forecast to persist for many months and therefore we can expect prices to rise and volume expectations to be tempered, particularly in the mass-market sector.

Personal contract purchase (PCP) car finance is continuing to underpin the market and should ensure the market does not sharply contract

“However, personal contract purchase (PCP) car finance is continuing to underpin the market and should ensure the market does not sharply contract.”

He predicted the full year at or around 2015 levels “which could prove positive for the used car market where supply had been catching up with demand.”

The SMMT figures showed the new car market grew by a steady 3.2% in the first six months with 1,420,636 new cars registered so far in 2016 – the best half-year performance ever recorded.

Growth was reported across all fuel types, with diesel and petrol registrations growing 2.3% and 3.0% respectively in the year-to-date. Alternatively fuelled vehicles (AFVs), meanwhile, continued the significant gains seen over previous months, up 21.3% compared with the first six months of 2015. AFVs now account for 3.2% of the overall new car market.

The SMMT said the 0.8% fall in registrations met expectations that market growth would stabilise after the record 2015. Fleet registrations continued the trend of recent months, driving the market with a 4.5% rise and compensating for a 4.5% drop in private registrations.

SMMT chief executive Mike Hawes said: “It is far too soon to determine whether the referendum result has had an impact on the new car market. The first six months saw strong demand at record levels but the market undoubtedly cooled over the second quarter.

“It’s important government takes every measure to restore business and economic confidence to avoid the market contracting in the coming months.”

Ford’s June 2016 highlights:

  • Ford total vehicle sales 41,284 and a sales share of 13.9%, 3.1 percentage points ahead of nearest rival
  • Fiesta is UK best-seller – click here to see our review on the new ST200
  • Ford has five models in the UK top 20 – Fiesta (1st), Focus (3rd), Transit Custom (9th), Kuga (14th) and Transit (19th)
  • Fiesta, Focus, C-MAX and Galaxy all lead their respective segments

Ford chairman and MD Andy Barratt:  “Sales remain surprisingly strong, despite the market hiatus around the referendum, which firmly underlines the success of exciting model range.

“We continue to consolidate and extend our long-standing UK market leadership through continued investment in exciting products and industry-leading technologies, delivered by the strongest UK dealer network..

“It’s a very busy time and, going into the summer, we are looking forward to full availability of the newly announced ST-line model range of Fiesta, Focus and Mondeo. Deliveries have commenced of the new Ford Edge, our flagship SUV, and the new S-MAX Vignale will be arriving in dealerships soon.”

Ford maintained its lead in retail car sales, which most accurately reflect the preferences of private buyers.  For June, Ford is four percentage points of retail car sales share ahead of its nearest rival.

The Fiesta remains the UK’s best-seller with 11,357 registrations in June, 2,520 sales and 0.9 percentage points of share ahead of its nearest rival. The broad customer appeal of Ford’s car range is demonstrated by Fiesta, B-MAX, Focus, C-MAX, Kuga, Mustang and Galaxy all occupying top three places in their respective market segments in June, boosted by more than 4,500 UK orders for the Focus RS.

record half-year

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