Home Breaking News Demand for new cars falls amid ‘ a difficult economic backdrop’

Demand for new cars falls amid ‘ a difficult economic backdrop’

by LLB staff reporter
4th Jul 24 11:12 am

The Society of Motor Manufacturers and Traders (SMMT) has said for the last nine months purchases of new cars by private buyers has declined.

The SMMT said that in June 67,625 new cars were bought by private customers which is down from 79,798 which is down compared to the same period last year.

The new car market grew by 1.1% year on year which was due to a 14.2% increase of fleet vehicles or those leased by companies.

So far this year pure battery electric cars are up by 16.6% which is up by from 16.1% from the first six months of last year.

SMMT chief executive Mike Hawes said, “The year’s midpoint sees the new car market in its best state since 2021 – but this belies the bigger challenge ahead.

“The private consumer market continues to shrink against a difficult economic backdrop, but with the right policies in place, the next government can re-energise the market and deliver a faster, fairer zero emission transition.

“All parties are agreed on the need to cut carbon and replacing older fossil fuel-based technologies with new electrified powertrains is the essential step to achieving that goal.”

Steve Gooding, director of motoring research charity the RAC Foundation, said: “It’s hard to see how the market is going to shift up a gear in the months ahead.

“Many private buyers will probably want to see how the election results shake out and what they mean for household budgets.

“As to boosting the EV market, there seems little chance of subsidies for buyers being restored, so if prices of new battery-powered cars are going to align with those for petrol and diesel equivalents then manufacturers will have to take the financial hit rather than the taxpayer.”

Ian Plummer, commercial director at online vehicle marketplace Auto Trader, said: “With average new car prices rising almost 40% over the last five years, it’s clear cost is the culprit.

“Manufacturers are responding with discounts but they’re failing to keep pace, which is forcing many buyers to opt for a used alternative.

“Whoever forms the next government needs to address electric car affordability and provide long-term stability for the market.”

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