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|SMMT registrations figures: Brexit could boost used car sector at the expense of new car market|
|Thursday, 04 August 2016|
Chris Bosworth, Director of Strategy at Close Brothers Motor Finance, comments on the SMMT UK Registration figures for July: “Today’s results show a continuation of the slowdown in the growth trajectory of the UK new car market which we saw emerge over the second quarter. The total figure also continues to disguise the increasing difference between the performance of the private sales market (where for the fourth month in a row sales have fallen year-on-year) and the fleet market where growth continues to be seen. It is probably still too early to gauge the effect that Brexit is having on the market as most of the cars sold in July will have been ordered prior to the vote so this may provide an additional headwind across the market in August.”
“One potential side effect from any cool-down in the new vehicles market, however, is a shift by consumers towards the used car sector. According to figures from the FLA, the used car market in the UK already grew by 15% year on year during the first quarter of 2016, and our own data suggests that July was a strong month for used car dealers. This is a similar trend to that which emerged in the immediate aftermath of the financial crash, where the used car market was boosted at the expense of the new car market. With car production in the UK having sustained somewhat of a golden period in recent years, supply of used vehicles is catching up with demand. This could lead prices to fall, and we could well see consumers opting for well-priced ‘nearly-new’ stock."
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