New car sales decline in March

Registrations of new cars fell again in March, but sales of vehicles to fleet and business buyers rose and the result was better than the industry had expected.

A total of 366,101 cars were registered last month, 7.9 per cent fewer than in March 2010, the Society of Motor Manufacturers and Traders reported on Wednesday.

However, the SMMT said that when sales attributable to scrappage incentives were discounted, the number of new cars registered was 5.9 per cent higher.

March is traditionally the biggest month of the year for car sales because of the licence plate changeover. The SMMT said that demand for the new 2011 plate was 1.4 per cent ahead of its forecast.

Paul Everitt, the industry group’s chief executive, said the figures demonstrated “sustained demand in what is traditionally the biggest month of the year”.

Registrations of cars by private buyers were down sharply – 17 per cent lower than a year ago – but those made by fleets rose by 1.3 per cent and business registrations 12.7 per cent, as corporate buyers bought or replaced their vehicles.

“Although the overall March performance was pretty respectable, it is notable that private car sales were again weak,” IHS Global Insight economist Howard Archer wrote. “This reflects the serious pressure that households are under.”

The SMMT said that volumes of new cars registered still remained well below pre-recession levels, even when the distortions caused by the scrappage scheme were removed.

Between 2004 and 2008, car registrations averaged almost 450,000 units in March.

The SMMT said it expected car registrations to decline further in the second quarter before stabilising and recovering in the second half of the year.

The group is forecasting car registrations will total 1.93m units this year, 5 per cent fewer than in 2010, but said it planned to revisit its forecasts later this month.