LONDON -- British new-car registrations were flat in July but demand from private consumers fell for the fourth month in a row suggesting a hit to confidence, according to data for the first full month since Britons voted to leave the European Union.
Sales rose 0.1 percent year-on-year to 178,523 vehicles with a 5 percent rise in business demand for fleet vehicles compensating for a 6 percent drop in demand from members of the public, industry association SMMT said today.
Car deliveries typically occur several weeks after purchase decisions so there is normally a lag in recording any changes in demand which may delay any Brexit vote effect.
The SMMT urged the government to maintain Britain's buoyant market. "The automotive market is a vital part of the British economy and it's important government delivers the economic conditions which instill business and consumer confidence," CEO Mike Hawes said in the statement.
Volkswagen saw its sales fall 9.5 percent in July, the ninth month out of the last ten in which VW's sales have dropped since the company's emissions scandal broke at the end of September.
- Download file, above right, for sales by brand for July and seven months.
Around four in five car purchases in Britain are made using cheap credit where buyers effectively rent a new car - typically for three years - before trading it in for a new model using a scheme known as a personal contract plan (PCP).
But Samuel Tombs, Chief UK economist at Pantheon Macroeconomics, suggested that a surge in car sales in recent years driven by low interest rates was coming to an end.
"Uncertainty about the economic outlook is making consumers cautious to purchase big-ticket discretionary items," he said.
The June 23 Brexit referendum has prompted predictions of an economic downturn in the UK, Europe’s second-biggest car market after Germany. Declining UK sales will probably slow the pace of growth in vehicle production across Europe in the second half, Continental said this week.
UK registrations are up 2.8 percent to 1.6 million in the first seven months following a strong first quarter. Sales fell by 0.8 percent in June, the country’s first decline since October.
The SMMT forecasts sales of 2.7 million new cars for the full year, up 1 percent from 2015.
Bloomberg contributed to this report