Report shows rise in new-car buying but highlights Brexit fears
A new report fears Brexit will create uncertainty for car buyers and sellers over the coming months.
The uncertainty is in contrast with the confidence, particularly earlier in the year, that pushed new-car sales by 23.1pc to 101,335 for the first six months.
And that confidence is still being reflected to an extent in latest figures for July which show new-car registrations for the first 20 days up 11pc to 21,525.
That brings the total for the so far to 122,860 (up 21pc). Light commercials are up 25pc.
Produced by respected economist Jim Power, the SIMI-sponsored Quarterly Review report, highlights many positive things about the industry and how it has recovered to be in a position to sell an estimated 152,000 new cars this year.
But it constantly comes back to the cloud of uncertainty hanging over the economy in general and the motor industry in particular.
Essentially it says a Brexit-induced slowdown could hit motor businesses and drivers’ directly and indirectly in the medium term.
Possible knock-on effects include:
*If the UK economy slows, or goes into recession, our economy would be hit – and that could means fewer people able to justify or afford a new car.
*Already there has been a surge in used UK imports in the first half of 2016 as a weak sterling makes them more attractive to buyers here – though other factors in the UK market may counterbalance that in the longer term.
* If sterling stays at current levels, or weakens (it’s already down 22pc since November), imports could increase even more. That could mean lower prices for all used cars. So you get less for your trade-in and have to pay more to change.
*Should imports hit secondhand values hard, dealers could decide to sell fewer new cars, fearing a build-up of used car stocks that they can’t shift, the report says.
However, the SIMI are also adamant that it is far too early to say what is the Brexit fallout will mean and claim there may be upsides for motorists, on imports especially, in the longer term.