New car sales traditionally provide a useful barometer of consumer confidence. In recent months, however, interpreting the figures requires a degree of caution given the significant volatility, in the car sales. Tax changes, the weather and the timing of Easter have all affected the volume of new cars sold and the annual growth rates over the last 12-15 months. This ‘noise’ can misrepresent the genuine underlying trends.
New car sales stuck in reverse
New car dealers in England, Scotland, Wales and Northern Ireland all posted hefty double-digit year-on-year declines in March. These ranged from 15% for England to 21% for Scotland with Northern Ireland coming in with an annual decrease of almost 17%. Last month was the quietest March for NI new car dealers in five years. This wasn’t due to the Beast from the East dissuading would-be car buyers from venturing out to dealers’ forecourts. Instead the steep falls are largely due to the inflated sales figures in March 2017. Back then Northern Ireland car sales increased by 10% y/y. However, this was distorted by a change in Vehicle Excise Duty in April 2017, which incentivised consumers to bring forward their plans to buy a new car.