Demand for new cars in the UK remained stable in May with a steady 2.5% growth in registrations, according to The Society of Motor Manufacturers and Traders (SMMT), as a commentator suggested the market would plateau in the second half of 2016.
A total of 203,585 cars were registered in the month, the highest May total since 2002.
Following the trend set in the previous two months, fleet registrations drove the growth, with an 8.8% rise counterbalancing a 3.0% fall in registrations to private customers.
Demand for diesel cars grew 5.0%, outstripping that for petrol models, which saw a marginal decline of 0.6%. Uptake of alternatively fuelled vehicles, meanwhile, continued to outpace the overall market with registrations increasing by 12.1%.
A tally of 1,164,870 cars has now been registered in 2016 – 4.1% ahead of 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 slowing following a record 2015.
Mike Hawes, SMMT chief executive, 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."
John Leech, head of automotive at KPMG UK, said: "This is the third month that consumer demand has softened and signals that the top of the market has been reached for consumers following 2015's all-time record sales. Sterling has weakened by 11% since November 2015 due to Brexit fears but so far this has not translated into transaction prices as manufacturers anticipate this is a short-term fluctuation.
"Cheap PCP car finance offered by manufacturers remains widely available and, with renewals rising, it is unlikely that we will see consumer demand soften substantially further this year. Fleet sales are unlikely to keep up their current pace of growth for long however it is likely that the total UK car market will plateau in the second half of 2016."