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Corporate registrations drive new car market to record monthly high

Corporate registrations drive new car market to record monthly high

New car registrations accelerated to all-time single month record with 562,337 models registered beating the previous record of 525,897 cars set in August 1997 and the corporate sector leading the way.

The March total was 8.4% up on March 2016 to take total first quarter 2017 new car registrations to 820,016 units - a new record quarter and up 6.2% on the same period last year. The previous record quarter was the first three months of last year when 771,780 new cars were registered.  

The Society of Motor Manufacturers and Traders (SMMT) said that the sales boom had been boosted by owners bringing forward registrations to avoid new Vehicle Excise Duty charges, which came into effect on 1 April. Under the new system all new cars, except for those with zero emissions, are subject to an annual flat rate charge.  

Fleets and businesses were the big contributors to market growth in March, with registrations up 12.6% and 11.9% respectively, though demand from private buyers also grew, with registrations climbing 4.4% to reverse the decline in demand seen during the previous month.  

Fleet registrations totalled 261,930 last month (March 2016: 232,720); business sector sales totalled 26,656 (March 2016: 23,816) and private sector volume was 273,751 (March 2016: 262,171).  

Following the recent trend, consumers, said the SMMT, were increasingly looking to invest in the latest low-emission technology, with March seeing a 31% surge in registrations of alternatively fuelled vehicles. Petrol cars experienced a notable uplift too, growing 13.2%, while demand for diesels also increased compared to the previous year, with nearly a quarter of a million buyers choosing them - the most ever in a single month.  

Mike Hawes, SMMT chief executive, said: “These record figures are undoubtedly boosted by consumers and businesses reacting to new Vehicle Excise Duty changes, pulling forward purchases into March, especially those ultra-low emission vehicles that will no longer benefit from a zero-rate fee.  

“This bumper performance probably means we will see a slowdown in April, exacerbated by the fact there are fewer selling days this year given Easter timing. Looking ahead to the rest of the year, we still expect the market to cool only slightly given broader political uncertainties as there are still attractive deals on offer.”   

In the first three months of 2017 fleet new car registrations were 8.7% up at 398,807 (2016: 366,879), business sector volume was up 8.4% at 34,720 (2016: 32,015) and private segment registrations were up 3.6% at 386,489 (2016: 372,886).

Light commercial vehicle registrations declined marginally in March, falling 0.9% - the first decline in March for five years - as the market stabilised following a sustained period of strong growth and record demand last year, according to SMMT figures. A total of 63,316 light commercial vehicles hit British roads last month, representing a small fall of 0.9%. Pick-ups and heavier vans experienced an increase in demand in March, up 23% to 9,660 units and 3.6% to 40,237 units respectively. However, figures for smaller vans painted a different picture, with registrations of vehicles weighing less than two tonnes down by 31.6% to 4,804 units and vans between 2.0-2.5 tonnes falling 4% to 8,496 units. Year-to-date new van registrations were 0.9% down at 97,970 units (2016: 98,906). Mr Hawes said, “The new van market has experienced strong levels of demand in recent years and this dip in registrations represents a natural rebalancing of the market. Despite the decline, demand remains at a historically high level with year-to-date registrations matching 2015’s performance, which was only exceeded by demand in 2016. We expect demand to remain stable at this high level throughout the year.”