New car market declines mainly due to last year VED changes
NFDA 05/04/2018
“The new car market declined by 15.7% compared with the particularly strong March last year, which was distorted by the Vehicle Excise Duty increase. Positively, NFDA members are seeing extremely strong sales of used 3-to-5-year-old vehicles, which continue to contribute to the health of their businesses”, said Sue Robinson, Director of the National Franchised Dealers Association (NFDA) commenting on the latest SMMT’s new passenger car registration figures.
New passenger car registrations in the UK saw a decline of -15.7% in March with 474,069 units which marked the fourth biggest March ever. Year to date the market is -12.4% down. Demand for petrol cars rose slightly at 0.5%, diesel was down 37.2% and alternative fuel vehicles grew by 5.7%. Overall in 2018, a decline of between 5 and 7% is predicted.
Robinson continued, “Despite the decline in new car sales, alongside a robust used car market, retailers also report strong aftersales demand with more motorists getting their cars serviced and repaired at franchised dealerships.
“NFDA estimates that a decline of 13% in the overall March 2018 market could be attributed to the changes in Vehicle Excise Duty rates introduced in April last year which prompted consumers to pull forward their purchases into March 2017. Yearly, the market is still expected to perform in line with initial predictions.
“We expect the market to start picking up from April and remain steady throughout the remainder of the year.”
Notes to editors:
The NFDA estimates that the impact of VED changes in April 2017 inflated March 2017 sales by 13%. Given that the sales for March 2017 were brought forward from within 2017, the year’s decline of 5.7% was not affected, as such without the distortion of the VED change March 2017 should have been broadly 5.7% weaker than March 2016, instead it was 8.4% stronger. The differential between an estimated undistorted March 2017 figure and the actual figure recorded is a 13% decrease.
About the RMI
The Retail Motor Industry represents the interests of operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. The RMI has a formal association with the independent Scottish Motor Trade Association which represents the retail motor industry in Scotland.