UK car sales recover slightly after six months of decline | Business

The UK car market staged a small recovery last month when sales of new vehicles rose for the first time in six months.

The Society of Motor Manufacturers and Traders said 81,969 new cars were registered in February, up 1.4% from a year earlier. February is traditionally one of the quietest months of the year, as buyers hold off purchases before the number plate change in March.

Samuel Tombs, the chief UK economist at the consultancy Pantheon Macroeconomics, said the increase was good news for the wider economy.

“February’s rise in car sales is another reminder that households’ spending likely will keep growing in the first quarter, ensuring that a retrenchment of business spending due to Brexit risks won’t tip the economy into a recession,” Tombs said.

He cautioned, however, that the recent pick-up might simply reflect some consumers bringing forward purchases, fearing that a further weakening of the pound in the event of a no-deal Brexit would increase the cost of cars later this year.

Demand for diesel cars continued to fall in February, with the number sold down by 14% at 24,284 vehicles, while petrol car sales increased by 8% to 53,164. The strongest growth was in sales of alternative-fuelled vehicles, which surged 34% last month to 4,521 as cutting-edge models attracted buyers into showrooms – marking almost two years of continued growth.

Registrations of zero-emission electric cars more than doubled to 731 units, although they still accounted for a fraction of the market, at 0.9%.

The SMMT chief executive, Mike Hawes, said: “It’s encouraging to see market growth in February, albeit marginal, especially for electrified models.”

However, the SMMT found that in the four months since the government drastically scaled back the plug-in car grant in October, the market for plug-in hybrid electric vehicles had only grown by 1.7%, compared with 29.5% over the first 10 months of 2018.

Hawes said the removal of the incentive was a “backward step and sends entirely the wrong message”. He added: “Supportive, not punitive measures are needed, else ambitions will never be realised.”

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The incentive, first introduced in 2011, knocked £4,500 off the purchase price of a new electric vehicle, but that was reduced by £1,000, while incentives of £2,500 to buy new hybrid cars were abolished altogether.

The government said that as the plug-in hybrid market had become more established, it would now focus on zero-emission models such as pure electric and hydrogen fuel cell cars.

The SMMT figures were released as car makers prepared to launch some 14 all-new electric and plug-in models at the Geneva motor show. There are about 40 plug-in models on the market in the UK, with another 20-plus expected to arrive in showrooms this year.

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