UK car sales slowed slightly in May
Car sale growth slowed to 2.4 per cent in May, down from a rate of 5.1 per cent a month earlier, nevertheless economists said that this wasn't a cause for concern.
Dealers registered 198,706 vehicles in May, marking 39 months of consecutive growth according to data released today by the Society of Motor Manufacturers and Traders (SMMT).
Car sales are up 5.7 per cent for the year to date, with dealers registering 1,119,072 cars in the five months of this year.
"More than one million cars have been registered in 2015 as a range of new products and attractive finance deals with low interest rates continue to draw buyers to showrooms," the SMMT said.
Read more: UK car sales hit 10-year high in 2014
(Source: Getty)
"A highly respectable performance"
Economists said the slight decline comes after a period of unprecedented growth for UK car sales, meaning it's to be expected, and is consequently an impressive figure still.
Howard Archer, chief UK and European economist at IHS, said.
It is still a highly respectable performance given the length of time that car sales have been growing and the high base the year-on-year comparisons are now coming from."
It seems unrealistic to expect car sales to keep churning out strong growth rates through the rest of the year given that they are now at such an elevated level.
Read more: Best month for car sales this century
Buoyed by plug-in car sales
The figures were buoyed by the fact Britons are increasingly driving plug-in cars – with demand for ultra-low emission vehicles increasing four-fold from the 2,838 registrations in the same period last year.
"The remarkable growth in demand for plug-in vehicles is expected to continue as the range of ultra low emission vehicles on sale increases," Mike Hawes, SMMT chief executive, said.
Additionally, fleet sales – companies staff car pools – rose by 4.5 per cent year-on-year with the SMMT saying new cars bought at the end of the recession are now being replaced.
Future growth prospects
Despite the slight slowdown economists are optimistic about future growth prospects.
Archer pointed to increasing consumer spending power, thanks to low inflation coupled with wage growth, as a factor which will continue to boost private car sales. He also said that decent economic growth, as well as relatively strong business confidence, would help fleet car sales.
Similarly, the SMMT expects car sales growth will stabilise throughout the rest of the year.
"We anticipate a natural levelling out of the overall new car market throughout the remainder of 2015", Hawes said.