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Fleet market falls in May and diesels come under pressure

Fleet and private registrations declined in May, with overall diesel take-up also showing a large downturn.

Row of cars

SMMT reported a 20.0% decline in overall diesel registrations in May.

The figures from the Society of Motor Manufacturers and Traders (SMMT) show that overall UK new car demand fell 8.5% last month to 186,265 cars registered, with the organisation attributing the downturn to the general election as well as the new VED rates.

The fleet market fell 5.3% to 103,657 units from 109,489 units in May 2016, while private registrations were down 14.0% to 76,554 units from 89,054 units. In contrast, the sub-25 ‘business’ market was up 20.1%, from 5,042 units to 6,054.

Mike Hawes, SMMT chief executive, responded: “We expected demand in the new car market to remain negative in May due to the pull-forward to March – which was an all-time record month – resulting from VED reform. Added to this, the general election was always likely to give many pause for thought and affect purchasing patterns in the short term.”

Of particular note was the 20.0% decline in overall diesel registrations, which fell from 101,844 units to 81,489. However, the alternatively fuelled vehicle segment rebounded following April’s decline, rising 46.7% to 8,258 units and taking a new record market share of 4.4%. Petrol registrations remained static, with a 0.4% rise to 96,518 units.

Year-to-date performance saw just a slight dip, down -0.6% to 1.2 million cars, with the fleet market up 2.4% to 589,161 units while business registrations were ahead 5.3% to 46,319 units and private registrations down 4.2% to 522,877. For the first five months of the year, diesel registrations fell 8.8%, with AFVs up 27.2% and petrol up 5.8%.

Looking ahead, the SMMT said it expects the market to remain strong over the year while KPMG maintained its forecast for 2017 new car sales at 2.5 million, falling from the all-time record of 2.7 million in 2016, with the company saying it expects a steady cooling of sales over the rest of the year.

Chris Bosworth, director of strategy at Close Brothers Motor Finance, added that they expect motorists to continue to move to the 1-3 year ‘nearly new stock’ market as Brexit continues to have a knock-on effect on consumers’ purchasing plans.

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.