UK new car sales slow for third month in a row

The UK new car market has declined for a third consecutive month in June after five consecutive years of solid growth and there are concerns of further falls.

According to the Society of Motor Manufacturers and Traders, new car registrations braked at a slower pace than in the previous two months, falling 4.8% in June after sales had fallen 8.5% in May and plunged 19.8% in April.

The SMMT said it expected demand to remain at a similarly high level over the coming months if consumer and business confidence holds - however confidence is wavering.

On bright spark was the alternative fuel sector, which enjoyed notable growth with demand rising 29.0% to 10,721 units maintaining a market share of 4.4% for the second month running.

Petrol registrations also rose by 2.5% and diesel plunged 14.7%.

Compact cars were most popular choice for buyers with superminis and small family cars comprising 60% of the market, while, small family cars were the only two segments to register growth in June, up 6.0% and 11.3% respectively.

Also, fleet and business buyers drove demand across the first six months with registrations up 1.5% and 2.7% respectively in contrast to a -4.8% drop in private purchases, although almost 650,000 consumers chose a new car this year.

The overall performance for the year to date has now fallen 1.3% on the first half of 2016 to 1.4m units, but 2017 is still the second biggest first six months on record.

Mike Hawes, SMMT chief executive, said: “As forecast, demand for new cars has started to cool following five consecutive years of solid growth but the numbers are still strong and the first half of the year is the second biggest on record. Provided consumer and business confidence holds, we expect demand to remain at a similarly high level over the coming months.

"It’s encouraging to see alternatively fuelled vehicles experiencing rapid growth but adoption is still at a relatively low level and more long term incentives are required if this new generation of vehicles is to be a more common sight on British roads.”

Shaun Armstrong, managing director of car finance provider Creditplus.co.uk, said: "The new car market needs a serious injection of confidence from somewhere, but confidence seems to be in rather short supply at the moment."

But while the new car market is suffering, the used car market is actually seeing steady growth, he added. "The squeeze on household finances due to lack of wage growth and rising inflation means people, more than ever, are looking for value."