(Adds quotes, details)
By Costas Pitas
LONDON, April 5 British new car registrations
rose to a record high in March as customers brought forward
purchases to beat an April tax rise, a car industry body said,
overcoming expectations of a slump after two years of record
New car sales rose 8.4 percent last month to 562,337, the
Society of Motor Manufacturers and Traders (SMMT) said, despite
forecasts that demand would fail to surpass recent years of
booming sales and be hit by Brexit.
Some consumers and businesses sought to avoid paying an
increase in excise duty which came into force from April 1 for
the most polluting vehicles, the SMMT said, adding it expected
demand to fall in the next few months.
"This bumper performance probably means we will see a
slowdown in April," said SMMT chief executive Mike Hawes. March,
generally the top-selling month of the year, is one of only two
occasions when new licence plates are issued.
"Looking ahead to the rest of the year, we still expect the
market to cool only slightly given broader political
uncertainties as there are still attractive deals on offer."
Demand for diesel cars rose only 1.6 percent compared with a
more than 13 percent rise for petrol vehicles, suggesting some
buyers may be put off by the prospect of additional taxes on
Overall, low interest rates continue to support demand in
Europe's second biggest car market, where around 80 percent of
sales are made using a personal contract purchase (PCP), whereby
a buyer effectively rents a vehicle, typically for two to three
At the end of the period they have to decide whether to buy
the car outright or switch to a new model and continue making
monthly payments, which the chief executive of one Britain's
biggest car dealerships Lookers told Reuters was
helping support demand.
"There are probably 1.4 million people coming off PCP this
year and the easiest thing for them to do is just to have
another one," said Andy Bruce, who predicts full-year
registrations will marginally rise.
"The long-term trend in new and used car sales is driven by
GDP and population growth, so inevitably it's going to keep
rising unless there's some sort of economic downturn."
(Editing by David Milliken and Alison Williams)