Figures released by the SMMT today show that the UK’s new car market in May was down 2.2% on the same month last year at 185,797 units.
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The decline continues a weakening trend this year in the UK car market. Analysts say that consumers are wary of recent interest rates and the possibility that house prices could decline later this year.
In May, interest rates rose for the fourth time since August to 5.5% in response to concerns over inflationary pressures in the economy. A further quarter point rise has been widely tipped to be announced by the Bank of England tomorrow.
However, the SMMT maintained that the decline in the car market in May was in line with expectations and that the market is on target to reach 2.335m units this year.
In the first five months of the year new car registrations were up 2.2% to 1,044,436 units.
The SMMT also pointed out that diesel car sales remain strong. Year-to-date diesel car sales are up 7.2% to 404,658 units.
