The UK new car market fell by 13.0% in July to 153,420 units – the steepest decline since December 2006, according to the Society of Motor Manufacturers and Traders (SMMT).
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“The shortfall was more pronounced than expected and reflects growing concerns of weaker consumer confidence,” it said in its monthly report on Wednesday.
July marked the third successive month of falling new car demand, with volumes down 7.4% in the past three months.
The July 2008 total was 13.4% or 23,810 units off the 1999-2007 average for the month of 177,230 units.
The SMMT’s revised forecast for 2008 suggests a 6.6% decline in volumes in the second half of the year. Year to date volume was off 3% to 1,400,899 units. The forecast for 2009 was also cut due to concerns that the economic situation will remain subdued for more prolonged period.
The 12 month rolling total fell to 2.361m units in July – the lowest level since February last year, but would still mean that full year 2008 figures would be in the top 10 annual totals.
The SMMT noted that July is a relatively small volume month, at 7.3% of annual sales, but the total was 7% below expectations. August is also a very low volume month and so September (when the registration plate changes half-yearly, spurring sales) should provide a much clearer indication of underlying trends.
Private sector volumes have fallen in every month of 2008, but the July drop of 16.8% to 58,414 units was the steepest recorded since February 2005. Year to date private sale volume was 595,761, down 6.2%.
BMW, Kia, Nissan and Volvo have made the best volume gains year to date.
“The 13% decline in July new car registrations reflects the continued deterioration in consumer confidence being experienced across the economy. Rising fuel and household bills, alongside falling house prices are making consumers reluctant to commit to new expenditure,” said Paul Everitt, SMMT chief executive.
“Vehicle manufacturers are doing their bit to support consumers. New cars are now 22% more affordable than they were 10 years ago and new technology is delivering more fuel efficient motoring. Industry needs the support of government in order to encourage the uptake of lower-emitting vehicles and ultimately lower the cost of motoring for consumers.”
The Ford Focus just beat the Fiesta to be the number one best seller in July. VW Golf’s was the best selling diesel in both July and over the year-to-date.
Only the mini and executive segments posted growth in July.
The diesel market fell in July (6.4% to 67,963 units) for the first time since February 2007. However, its market share continued to improve at 44.3% compared with 41.2% a year ago. Year-to-date volumes remained positive at +7.3% to 604,331 units, but are likely to drop as the overall market slips.
Market shares should edge higher as the consumer looks for more fuel efficient options, the SMMT said, adding that demand for alternatively fuelled vehicles bucked market trends and rose by 19.4% in July to 1,479 units.
