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New car market drops 20% as new VED rates bite and petrol preference continues

Mercedes C Class
Mercedes C-Class up to number 3 in the best-sellers

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4 May 2017

SMMT key points of April registrations

  • New car registrations fall -19.8% to 152,076 units as market reflects Vehicle Excise Duty (VED) changes
  • First downturn in alternatively fuelled vehicle segment for 47 months as hybrid demand hit by higher VED rates.
  • Year-to-date market remains strong, up 1.1%, with record 972,092 cars registered in first four months.

NEW CAR registrations dropped 20% in April to the month’s lowest figures in five years in the expected response to new VED rates – while the swing to petrol preference over diesel continued.

It followed an all-time record month’s tally in March of 562,337 as buyers raced to beat the new road tax – especially on previously tax-free low emission cars such as hybrids – that will bring in billions extra for the Government over the next three years alone. It was also the first month of new 17 registration plate.

Figures published today by the Society of Motor Manufacturers and Traders (SMMT) show that 152,076 new cars were registered in April, a 19.8% decline for the month year-on-year.

Demand was down across the board, with registrations by private buyers, businesses and large fleets falling 28.4%, 21.0% and 12.3% respectively.

Petrol, diesel and alternatively fuelled vehicle registrations also declined, with AFV demand down for the first time in 47 months, albeit by a marginal 1.3%.

registrations dropped 20%

Petrol continued to be the fuel of choice with 51% of the registrations against 44.9% for declining diesel, continuing the swing which year-to-date gives petrol 51.9% of the market against 44.1% diesel with alternatively fuelled vehicles (AFV) at 4.1%. See JATO analysis ‘Tough times for diesel’.

However it is worth bearing in mind that SMMT data for March obtained by Business Car Manager showed fleets still preferring diesel against petrol by nearly 2:1, with 196,391 diesel registrations against 104,497 petrol – indicating that private buyers, usually with far lower mileages, are dominating the petrol preference charts.

Changes in best seller chart

  • The lower registrations also saw some interesting changes in the best sellers top ten, with Ford Fiesta still top but Nissan Qashqai up to second, followed by a brace of rising Mercedes with the C-Class third and A-Class fourth, pushing the year’s second best selling Ford Focus down to fifth and the year’s No3 the Vauxhall Corsa out of the top ten completely as the Audi A3 and BMW 1 Series entered the chart.

Despite the substantial falls in the month, the overall new car market remains strong in the year to date, with new registrations in the first four months up 1.1% year-on-year to 972,092 – the highest level on record.

SMMT chief executive Mike Hawes said: “With the rush to register new cars and avoid VED tax rises before the end of March, as well as fewer selling days due to the later Easter, April was always going to be much slower.

“It’s important to note that the market remains at record levels as customers still see many benefits in purchasing a new car. We therefore expect demand to stabilise over the year as the turbulence created by these tax changes decreases.”

registrations dropped 20%

 

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