END of month registrations are indicative of a car market under duress, reckons Cox Automotive.
H1 started strongly for the market with better than expected performance, allowing Cox to re-evaluate its market forecast to over 2 million registrations in 2025 (2,035,750), up 3.2% year-over-year.
But Cox points to new car registrations at the end of H1 featuring a final few days surge, indicative of short-cycle activity with sales teams pushing a high volume of last-minute sales to meet targets.
Philip Nothard, Insight Director at Cox Automotive, said: “The fragility of the new car market has come to light in the second quarter of the year. While we celebrated a positive start to the year, what is now apparent is that manufacturer-led incentives and a short-term pull-forward effect due to VED charges temporarily masked the impact of ongoing challenges such as interest rates and waning consumer demand.
“Many manufacturers appeared overly confident after the performance seen between January and March. To the extent that they pulled back or withdrew incentives entirely. This confidence was quickly undermined as showroom activity saw a rapid downturn.”
Brokers demonstrate expanding activity
While this may be true at the dealership level, several leasing brokers report record sales. At Central Contracts, Strategy Director Gareth Roberts says that its established OEM relationships and its ability to consistently deliver successful results has resulted in record sales.
While Luke Mears at VIP Gateway says he has tripled his team to meet the increase in sales demand.
“Being able to write large volume commitments from OEMs is creating a significant demand in the market place. It’s having a big effect for us and we’re seeing a big uplift in sales as a result.”
Electric Car Grant gives boost to EVs
While the recently introduced Electric Car Grant will give the market “a marginal boost” according to Cox, it believes that EV registrations will account for 25% of the market by year’s end, falling short of the 28% target set out by the Zero Emission Vehicle mandate.
It certainly seems to have assisted Gateway2Lease during August, the Bromsgrove leasing broker saying that it has seen an 18% uplift in enquiries following the announcement of the Electric Car Grant.
Managing Director Kelly Marshall said the Grant has been well received by customers but cautioned that the programme needed clarity and consistency in order for it to succeed in its objectives.
Nothard concluded that while the latest new car report in its Insight Quarterly revealed challenges within the market, lower interest rates, reduced inflation and the expansion of new market entrants were key to bringing extra growth to the market.
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Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
