Unhelpful talk of a crash in new car registrations belies the facts. New car registrations were indeed down in March by -15.7%. Two issues are relevant, however. First, March 2017 was a bumper month, the biggest ever in fact, as many consumers pulled forward purchases ahead of changes to Vehicle Excise Duty in April. Secondly, we must remember that this March is still the fourth best in a decade and the market is still at historically high levels with well over 700,000 motorists driving home a new car so far this year.
Nonetheless, there is cause for concern given the market for new cars is down across the board. Private, business and fleet were all negative and, in the CV sector a drop of -5.6% is indicative of declining business and consumer confidence. Furthermore, the continuing drop in demand for diesel cars and disappointing demand for alternatively fuelled vehicles is further evidence of the need for clearer government policy, incentives and advice that encourages consumers to buy the right car for their driving needs irrespective of fuel type. Consumers and businesses also need the right economic conditions to have the confidence to buy new vehicles and it is important to remember that a thriving new car market is essential to the overall health of our economy.
We were pleased to see the merits of Vauxhall’s Luton plant recognised this week, with the announcement that the latest Vivaro van will be built in Britain. The decision helps to secure around 1,400 jobs and in time could see Peugeot and Citroën branded vans made in the UK. The UK remains a centre of excellence for vehicle production – with one of the most productive workforces in Europe – an essential component of our current competitiveness, along with our frictionless trade with Europe. We will continue working closely with government to deliver an industrial strategy and sector deal for automotive, one which builds on our long heritage in vehicle manufacturing.
Finally, you will have noticed that Update has changed slightly this week – we hope you like the new format and style and it continues to be on your essential reading list every Friday.
Mike Hawes, SMMT, Chief Executive
