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|SMMT car registrations: "2016 has been another great year for the sector"|
|Friday, 06 January 2017|
Chris Bosworth, Director of Strategy at Close Brothers Motor Finance comments on the SMMT UK monthly automotive registration figures for December: “December’s new car registration figures confirm that 2016 has been another great year for the sector, with sales in the new market surpassing 2.7 million registrations for the first time in recent history. This demonstrates the resilience of the motor industry, despite the uncertainty created by the vote for Brexit.
“Nevertheless, despite the new car sector showing strong growth in the business, fleet and alternative fuelled markets, the success in these sectors have masked the continued fall in private sector sales in 2016, which has seen its ninth successive month-on-month drop in December. Additionally, a recent BBC investigation found that a fifth of new cars in the UK are estimated to be “pre-registered” – if true, this could have profound implications on an already dwindling market. A key reason for there being so many pre-registered cars is that they are often the only way dealers can achieve monthly sales targets set by manufacturers. And so, with 20% of new vehicles potentially not being on the roads for a further 90 days, this, in theory, has been skewing sales figures.
“What is certain is that this year we have seen many consumers flocking to the used-car sector and preferring to finance 1-3 year ‘nearly new stock’ over brand new vehicles in the past few months, and we expect this trend to continue into the New Year.
“With the impact of rising inflation on consumer spending alongside the effect of the changes to salary sacrifice from April 2017 to the business market, the private sales market will become increasingly important to overall registrations in the UK. Innovations including more sophisticated driver aids, increase in safety improvements, and the uptake of ULEV will therefore be fundamental in encouraging consumers to purchase new over used vehicles in 2017.”
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