(Adds details, quotes)
By Costas Pitas
LONDON May 4 British new car registrations
slumped by 20 percent in April, the biggest year-on-year drop
for over six years after record demand in March, when customers
brought forward purchases to avoid a tax increase, an industry
body said on Thursday.
Sales fell 19.8 percent to 152,076 vehicles last month,
traditionally a period when fewer vehicles are sold after a new
licence plate series is issued in March, the Society of Motor
Manufacturers and Traders said.
Demand in March was at a record high as individuals and
businesses in Europe's second biggest autos market sought to
avoid paying an increase in excise duty that came into force
from April 1 for the most polluting vehicles.
Registrations so far this year are up 1.1 percent, despite
forecasts that demand would fall by at least 5 percent this year
due to the uncertainties around Brexit and after consecutive
Following an 8.4 percent rise in March and a slump in April,
also hit by fewer selling days due to Easter, the SMMT said it
foresaw less erratic swings in the months ahead.
"We ... expect demand to stabilise over the year as the
turbulence created by these tax changes decreases," SMMT Chief
Executive Mike Hawes said.
But the industry faces a number of challenges ahead
including new levies and tighter rules on the most polluting
vehicles, which appear to be already dampening demand for diesel
Demand for diesel fell 27 percent last month, which compared
with a fall of 13 percent for gasoline-powered vehicles, as the
government prepares plans to tackle air pollution which could be
announced as soon as Friday.
Britain's Financial Conduct Authority also said last month
it would be launching a review into finance packages offered to
customers buying cars due to concerns that there might be
"irresponsible lending in the motor finance industry."
Cheap finance has been key to the success of the sector in
recent years with up to 90 percent of cars sold using personal
contract plans, whereby customers effectively rent a new car for
two to three years by making monthly payments before often
trading in for a new model.
(Editing by Andy Bruce, Greg Mahlich)