New car sales have started 2019 the same way as last year, according to the SMMT figures for Q1, with a drop in new registrations. While the number of new cars sold in March held up relative to a year ago, the quarterly total of 16,676 was still down 3% (524 fewer vehicle sales) below the corresponding quarter in 2018.
The make-up of carparks has long been a good indicator of trends in the domestic economy, given that cars are the biggest discretionary expenditure item after purchasing a home. But the car market has also become a key barometer of what is happening in the global economy, and trends in the sector now need to be closely watched to understand what’s going on.
Car sales stuck in reverse
One of the trends that we have been seeing in car sales is motorists shunning diesel vehicles for petrol and plug-in versions. But while consumer behaviour is changing in response to the eventual phasing out of diesel cars, we are also seeing overall sales volumes continuing to follow a downward trend. This highlights a lack of consumer confidence which in turn reflects a squeeze on household incomes. In short, new car sales have been in a state of managed decline over the last two years, and this appears to be continuing. Continue reading