Britain’s car industry enjoyed a record September for new vehicle sales, but said Brexit uncertainty could weigh on future demand.
The new 66 plate helped to lift new car sales by a modest 1.6% last month compared with a year earlier to a total of 469,696, according to the Society of Motor Manufacturers and Traders (SMMT).
It was the highest number on record for September, typically a strong month for sales because of the plate change.
Howard Archer, the chief UK economist at IHS Global Insight, described the 1.6% rise as “decent if unspectacular”.
“Strong year-on-year growth in car sales are becoming ever harder to achieve as they are coming from a high base following extended healthy gains,” Archer said.
“There is also the possibility that September’s modest growth rate in car sales could be a sign that consumers are becoming more cautious about making major purchases such as a car due to heightened uncertainty following June’s Brexit vote.”
A 7.3% increase in fleet sales was behind the rise in September, while sales to private buyers fell 1.7%. The top three best sellers were the Ford Fiesta, Vauxhall Corsa and Volkswagen Golf.
Mike Hawes, chief executive of the SMMT, said, the 66 plate, new models featuring the latest technology and cheap financing deals had all helped to boost demand in September.
He said, however, that the future strength of the UK car market was at risk because of the uncertainty posed by the Brexit vote.
“Business and consumers place September orders many months in advance, so the ability of the market to maintain this record level of demand will depend on the ability of government to overcome political uncertainty and safeguard the conditions that underpin consumer appetite,” Hawes said.
The expectation is that the sharp drop in the pound since the Brexit vote will start to weigh on consumers over the coming months. Inflation is expected to rise and companies are expected to limit wage growth as they seek to keep their costs down.
“There is a very real likelihood that inflation will move above earnings growth during 2017,” Archer said.
In the first nine months of 2016, 2.15m new cars were sold. That was 2.6% more than at the same point in 2015, and only the second time that the 2 million cars have been sold by September since 2004.
