UK car registrations climb 3.4% as market continues slow recovery

UK new car registrations rose 3.4% in May, the second consecutive month of growth, the Society of Motor Manufacturers and Traders (SMMT) said on Tuesday.

May’s sales and April’s 10.4% year-on-year increase followed a year-long slump in registrations, but the SMMT cautioned that the increase reflected a poor performance in the same month in 2017 after a tax rise came into effect rather than a stellar performance.

To put the results fully in context, the market saw a substantial 8.5% decline in May last year.

SMMT chief executive Mike Hawes said: "To ensure long-term stability, we need to avoid any further disruption to the market, and this will require sustainable policies that give consumers and businesses the confidence to invest in the new cars that best suit their needs."

Private new car registrations saw a 10.1% year-on-year increase in May, significantly bettering the 6.7% average decline of the previous 12 months.

Dual purpose, supermini and small family vehicles were the most popular sectors, while demand for sports cars and plug-in hybrid cars grew 12.7% and 72.7% respectively.

Despite the largely positive news, the overall market remains down in the current year as new registrations have fallen 6.8% as demand is impacted by economic and political uncertainty.

Alex Buttle, director of Motorway.co.uk, said: "Let's not kid ourselves; the industry is still facing a crisis, and it's far too early to be talking about a recovery. It's not all doom and gloom though. Both petrol and AFV new registrations were up substantially last month and it's dire diesel sales that continue to massively skew overall figures."

While registrations of petrol cars increased by 23.5%, diesel registrations dropped for the 14th consecutive month with a 23.6% decrease as concerns over diesel emissions and possible higher taxes continued to put buyers off.

Declines also continued in the business and fleet sectors, with registrations falling 9.6% and 0.7% respectively.