John Leech, Head of Automotive for KPMG in the UK, commented on today’s new car registration figures published by the SMMT:
“UK new car sales were down 0.8% in June as consumer demand fell by 4.5%, although offset in part by a rise in fleet sales. This is the third month that consumer demand has softened and there are many who feel that the top of the market has been reached following 2015’s all-time record sales. Falling consumer confidence since the EU referendum is likely to further reduce sales in the coming months.
“Manufacturers are evaluating their positions carefully – although the industry is in good health and able to support the market, the decline in Sterling is widely forecast to persist for many months and therefore we can expect prices to rise and volume expectations to be tempered, particularly in the mass-market sector. However, personal contract purchase (PCP) car finance is continuing to underpin the market and should ensure the market does not sharply contract.
“Overall, we can expect the new car market to fall in the second half of 2016 by around 4%, leaving the full year at or around 2015 levels. It may also be that these changes prove positive for the used car market where supply had been catching up with demand.”
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