March 2018 new car market shows big drop
Demand for new cars went down in March by nearly 16% compared to this time last year
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THE new car market in March 2018 dropped 15.7% according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

While that’s a substantial slip in sales, it was still the fourth highest March on record.

And it should be remembered that March 2017 was the largest ever for new car registrations, as buyers seized the chance to purchase cars before new Vehicle Excise Duty (VED) rates came into force in April last year

However, the big issue remains the decline in diesel demand. Fuelled by government uncertainty created over its treatment of diesel in relation to clean air impact and company car taxation, diesel slumped horribly – down 37.2% compared to March 2017.

Alternative Fuel Vehicles (AFVs) were up 5.7%, driven by PHEV demand and petrol nudged up modestly by 0.5%.

March 2018 new car market shows big dropThe SMMT said that economic and political uncertainty and confusion over air quality plans continued to affect confidence, resulting in declines across all sales types.

Demand from business, fleet and private buyers all fell in March, down -14.3%, -15.0% and -16.5% respectively, it said.

New car registrations have fallen for the 12 successive months, said the SMMT, with year-to-date performance down -12.4%.

Mike Hawes, SMMT Chief Executive, commented on the disappointing figures:

March 2018 new car market shows big drop
Mike Hawes: disappointing figures

“March’s decline is not unexpected given the huge surge in registrations in the same month last year. Despite this, the market itself is relatively high with the underlying factors in terms of consumer choice, finance availability and cost of ownership all highly competitive.

“Consumer and business confidence, however, has taken a knock in recent months and a thriving new car market is essential to the overall health of our economy. This means creating the right economic conditions for all types of consumers to have the confidence to buy new vehicles.

“All technologies, regardless of fuel type, have a role to play in helping improve air quality whilst meeting our climate change targets, so government must do more to encourage consumers to buy new vehicles rather than hang onto their older, more polluting vehicles.”

Ian Gilmartin, Head of Retail & Wholesale at Barclays Corporate Banking, commented:

“There’s no disguising the fact that it’s another disappointing month for the new car sector. Achieving strong sales when new plate models hit the road is central to most sellers overall strategy, so there will be some concern at the continued slump revealed in these figures.

March 2018 new car market shows big drop“However, the comparison with last March is a little misleading, as the record result posted then was in part due to sales being brought forward ahead of tax changes that came into place in April 2017. Some of the fall can also be attributed to a prolonged natural correction following a bumper couple of years, which we always knew was going to be unsustainable in the long run.

“Car sellers shouldn’t be too disheartened – the industry is still producing very high quality products, with most cars, including diesel models, more environmentally friendly than ever. If manufacturers and the motor supply chain can retain their focus on the future, they will be able to help retailers attract drivers back to the showrooms.”

 

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