UK new car registrations up 2.5% in May

New car registrations in the UK rose 2.5% in May to 203,585, according to the Society of Motor Manufacturers and Traders, marking the highest total since 2002.

Fleet registrations drove the growth, with an 8.8% rise offsetting a 3% drop in registrations to private customers.

Meanwhile, demand for diesel cars outstripped demand for petrol models, up 5% versus a 0.6% decline in petrol.

The SMMT said 1,164,870 cars have now been registered in 2016, which is a 4.1% jump compared to the same period last year.

However, May demonstrated a continuation of the easing of growth, being the second consecutive month of sub-3% growth in registrations – evidence of increasing market stability following a record 2015.

Chief executive Mike Hawes said: “The new car market in May remained high with compelling offers available on the latest vehicles, but the low growth is further evidence of the market cooling in the face of concerns around economic and political stability.

“Whether this is the result of some buyers holding off until the current uncertainty is resolved or a sign of a more stable market for new cars remains to be seen.”

Howard Archer, chief European and UK economist at IHS Global Insight, said: “New car sales were pretty resilient in May, but the growth rate has noticeably slowed over the past couple of months. Admittedly, it was always going to be difficult for car sales to keep churning out high growth rates given that sales are now coming from a high base following extended healthy sales.

“Nevertheless, a second successive dip in private sector car sales may well be the consequence of consumers becoming more wary about buying big ticket items due to concerns over the economic outlook being magnified by the looming EU membership referendum.”