New UK car sales registered their first February drop in six years, in signs the market could be feeling the pinch from early signs of a consumer spending slowdown in the British economy.
Annual new car registrations declined by 0.3 per cent last month, according to the latest figures from the Society of Motor Manufacturers & Traders (SMMT), after strong growth in January. Private car sales – a better gauge for consumer demand – dropped 4.4 per cent in February compared to the same month last year. They had climbed 5 per cent in January.
Britain’s motoring market has been booming in recent years, so far defying scares it would be hit hard following the Brexit vote. New car registrations hit an all-time record in 2016 but February’s small dip comes after separate surveys of the UK economy have revealed a softening in the consumer spending after the start of the year.
February’s figures also do not seem to have been boosted by a shift to Britain’s vehicle taxes due to kick in from April.
“2017 will progressively become a more difficult year for car sales after they reached a record high in 2016″, said Howard Archer at IHS.
Still, Mike Hawes, chief executive of the SMMT said sales were likely to pick up next month, saying:
February is traditionally one of the quietest months of the year and a steady performance was expected following another year of record growth in 2016.
We expect to see the market bounce back in March as buyers take advantage of the new ’17-plate, as well as the last chance to buy a car eligible for current lower [tax] rates before they change on 1 April.
Chart via Bloomberg