SMMT reports March biggest ever month for new car registrations
- New car market grows 5.3% in March 2016
- Fleet sector demand up 6%
- More than half a million buyers take advantage of plate change.
- Registrations increase 5.1% in 2016 Q1, to 771,780 units.
- Alternative fuel vehicles see 21.5% jump in demand
- Robust growth in diesel and petrol registrations.
ANOTHER month for record registrations in March, up 5.3%, has brought a cap hpi warning that consumer demand is key to market stability.
The vehicle data specialists have reported a healthy used car market with demand strong at the auctions and on the forecourt. But detailed analysis by cap hpi over the next few days of the latest SMMT figures for the record registrations will give a firmer picture of their likely impact on the used car market.
Commenting on the market Derren Martin, senior editor at cap hpi, said: “March was the strongest month on record for new registrations, beating a record month in 2015, and it was particularly interesting to see the recovery in the fleet sector with demand growing by 6.0%, having struggled in January and February.
“How the industry copes with increasing volumes of vehicles returning to the market, particularly from ‘tactical registrations’ via pre-registrations and short-cycle daily rental channels, will underpin the stability of the used market.
“cap hpi has reported the strength of the market through the first quarter of this year. We are seeing this bullish market reflected in new registrations, used demand and dealer sentiment. Continued strong consumer demand will be the key factor to underpin residual values over the coming months, as record volumes of vehicles return to the market.”
The company undertakes a monthly survey of dealers and reported 32% of dealers indicated that they had seen an increase in finance penetration.
Over half the respondents claimed that the current trade prices are too high. Adding to this is the pressure on margins, and signs that there is a reluctance from consumers to absorb increased forecourt prices.
We anticipate that the market will start to cool from April as the weaker Pound caused by the impending EU referendum starts to feed into increased transaction prices – John Leech, KPMG head of automotive.
Martin continued: “There will also be an abundance of late-plate cars appearing in the market over the next few months, indeed “16” plates were already being advertised on popular used car websites from the early days of March.
“Concerns around oversupply do need to be tempered with the fact that retail demand for used cars remains healthy – consumers are still actively buying, interest rates are low and the economy remains strong.”
But there was a word of caution too from John Leech, head of automotive at KPMG. He said: “The UK new car market grew by 5.3 per cent in March which continues the recent trend of strong new car sales due to buoyant consumer confidence and attractive PCP finance deals.
“We anticipate that the market will start to cool from April as the weaker Pound caused by the impending EU referendum starts to feed into increased transaction prices.
“Overall the first quarter was up 5.1 per cent and we expect that 2016 will set another all-time record for new car sales in the UK.”