UK car sales fell ahead of EU vote

Ferrari 488 GTB

Sales of new cars in the UK fell for only the second time in more than four years in June, in a sign that consumers are feeling less confident about spending money on big items.

The number of cars sold dropped 0.8% to 255,766 last month, according to the Society of Motor Manufacturers and Traders.

It was the first monthly fall since October, when a 1.1% decline in sales brought to an end a record 43 consecutive months of growth.

For the month of June, it was the first fall in five years.

Mike Hawes, the SMMT’s chief executive, said it was too early to tell what impact the vote to leave the EU would have on car sales, but said the government must do all it could to shore up confidence.

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

Consumer confidence fell sharply immediately after the result of the 23 June referendum was known, according to a YouGov/Cebr poll.

“In the coming months this is likely to filter through into a much weaker environment for retail sales and household spending – particularly on big ticket items,” the pollsters said.

British consumers appeared to have an insatiable appetite for new cars over recent years as buyers were attracted by cheap finance deals for more fuel efficient models.

Aside from sales, there are fears that car manufacturing could take a hit from the Brexit vote, with foreign companies delaying investment decisions or choosing other locations to open factories.

The UK car industry has traditionally benefited from strong investment from overseas car manufacturers, including Nissan in Sunderland and Toyota in Derby. Companies committed to invest a total of £2.5bn in UK car production last year alone.

The top three most popular cars in June were the Ford Fiesta, the Vauxhall Corsa and the Ford Focus.

Over the first six months of 2016, new UK car sales were up 3.2%, with 1.42m registrations between January and June, the strongest half-year performance on record.

The SMMT is forecasting that 2.703m new cars will be sold in 2016, up 1% on 2015.

Powered by Guardian.co.ukThis article was written by Angela Monaghan, for theguardian.com on Wednesday 6th July 2016 10.51 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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