New car market grows in April, but likely an anomaly

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Author: | Updated: 04 May 2018 12:20

The UK’s new car market grew by 10.4% in April, with 167,911 new units registered, compared to 152,000 in the same month of last year.

It’s the first month of growth for new registrations since revised VED rates came into force in April 2017, but the Society for Motor Manufacturers and Traders (SMMT), is warning that the increase is an anomaly rather than a reverse in fortunes for the market.

So far in 2018, registrations are down –8.8% year-on-year, with the slowdown expected to continue through 2018.

UK new car registrations April 2018

“Increase is not unexpected”

April’s increase was caused by a number of factors: Easter resulted in an additional two selling days last month, while March’s adverse weather pushed some deliveries into April.

But the most significant factor at play will have been the VED changes that came into force last April, which caused a pull forward to March, subsequently depressing last April’s market.

april new car registrations 2002 - 2018

Private demand grew by 26.3%, while the fleet market remained stable at 0.9%. Elsewhere, business registrations saw a significant –12.9% decline compared with the same month last year.

Diesel down, AFVs in

The seemingly endless trend of declining diesel numbers continues to suppress the market, with overall diesel registrations down –24.9% in April. So far this year, that marks a –31.9% loss of its market share, which now stands at just 32.9%.

april registration data diesel, petrol, hybrid

Read more: First-year VED rates are changing for diesels

However, 38.5% growth in petrol, and a significant 49.3% increase in alternatively fuelled vehicles (AFVs) managed to offset the decline of diesel for the first time in many months.

While an almost 50% increase sounds significant, it’s worth bearing in mind that AFVs such as hybrid and electric vehicles only account for just 5.6% of the overall market.

Market decline expected to continue

While a 10.4% increase in registrations would usually be considered a positive, the new car market remains down by –8.8% so far this year. Although the decline is expected to slow over the coming months, political and economic uncertainties will continue to negatively impact the industry.

Mike Hawes, SMMT chief executive, said: It’s important not to look at one month in isolation and, given the major disruption to last April’s market caused by sweeping VED changes, this increase is not unexpected.

group of car

“While the continuing growth in demand for plug-in and hybrid cars is positive news, the market share of these vehicles remains low and will do little to offset damaging declines elsewhere.”

Ashley Barnett, head of consultancy at Lex Autolease, added: “It’s unsurprising to see new car registrations for April rebound […] given the VED changes in 2017 which saw more deliveries brought forward to March. […] This is not necessarily the best indicator of how the new vehicle market is performing.”

The top 10

With Q1 now over, it’s becoming clear there’ll be few surprises when it comes to the most popular models. The Fiesta remains king, and was most likely boosted in April by a 27% increase in supermini sales.

april 2018 most popular cars

In at number two you’ll find the Golf – also the most popular car on ContractHireAndLeasing. Third position was taken by the Nissan Qashqai in April, while other SUVs such as the Ford Kuga and Vauxhall Mokka X make it into the year-to-date list.

You can find more registration data and industry news from the SMMT by clicking here.

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