New car market grows despite ‘worrying decline in retail demand’

The UK’s new car market has grown for eight consecutive months, figures show.

Registrations in March were up by more than 17% compared with the same month last year, according to preliminary data from the Society of Motor Manufacturers and Traders (SMMT).

Large fleets, which include vehicles owned by large organisations such as Government agencies and rental companies, drove the uptake of new cars.

Ian Plummer, commercial director at online vehicle marketplace Auto Trader, said that the “positive” headline numbers “mask a worrying decline” in demand from private buyers.

He said: “Recent sales growth has been driven by the fleet sector, but early indicators on our marketplace suggest a dampening in appetite for new cars as the cost-of-living crisis bites the market.

“Visits to Auto Trader’s site were up 17% on last year in March and new car stock rose by almost a third (30%).

“But the volume of consumers viewing new car adverts and inquiring about new cars are down more than 12% and 40% respectively.

“Currently, almost all (93%) of new car sales are bought on finance, so we suspect rising interest rates are to blame.”

March was the largest month on record for registrations of pure battery electric new cars.

The month is viewed as a bellwether of the automotive industry’s performance as new number plates are introduced, traditionally leading to an increase in demand.