Record UK Car Registrations in March 2017
March was the best month to date for UK car registrations, according to the car industry trade body. The Society of Motor Manufacturers and Traders (SMMT) said 562,337 new cars were registered in March, up 8.4% on the same month last year. Those figures were boosted by a change in the number plate in March and planned changes to the Vehicle Excise Duty (VED), it said.
Many customers would have benefited by buying their car before 1 April.
Changes in the way cars are taxed came into effect on that date. In particular, anyone planning to buy a low-emission car would have had an incentive to buy before 1 April.
“These record figures are undoubtedly boosted by consumers reacting to new VED changes, pulling forward purchases into March, especially those ultra-low emission vehicles that will no longer benefit from a zero-rate fee,” said Mike Hawes, SMMT chief executive.
Sales of diesel cars rose 1.6% in March to 244,463. However, diesel’s share of the overall car market fell to 43%, from 46% in March 2016.
Diesel cars have fallen out of favour with authorities and customers as they have become more aware of their output of polluting nitrogen oxides. That was reinforced in 2015 when Volkswagen admitted to fitting cars with devices which allowed them to cheat emissions tests.
The UK government has until the end of this month to publish its plan to meet EU air quality limits. Older diesel cars could be targeted under that plan. That has upset many car owners who were encouraged to buy diesel cars in the early 2000s by tax changes made by the Labour government.
Mr Hawes warned that the March sales bonanza could be followed by slowdown in April, particularly as there are fewer selling days in April because of the timing of Easter. But he expects the market to remain strong this year.
“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,” Mr Hawes said.
However, some economists are less optimistic. Howard Archer, chief economist at IHS Markit, says the industry will face “an increasingly challenging year”. He says that rising inflation and sluggish wage rises will erode the purchasing power of consumers. Meanwhile, imported cars are likely to become more expensive because of the fall in value of the pound, he points out. “There may have been an element of a last hurrah in March’s record car sales performance,” he said.