UK motor industry shifts down a gear as inflationary sentiments creep in
Britons are expected to put the brakes on their spending for new cars in 2017 as inflation bites, new data by consumer research company GfK finds.
In research out today, it forecasts that car sales will slide by 5 per cent this year, following last year’s record.
Joe Staton, head of market dynamics at GfK, said: “Our latest data shows that, certainly in terms of car sales, Britain’s post-Brexit consumer boom shows signs of weakening in the face of higher prices and rising inflation,” he said.
The “rising cost of fuel pushing up inflation”, “increased vehicle excise duty” and “new personal injury compensation rules” were said to be contributing to soaring insurance premiums and car price rises that are depressing car company sales, Staton added.
The proportion of people who believe that consumer prices in general have risen over the past 12 months is up by five per cent in February 2017 to 79 per cent. This is five per cent higher than the 74 per cent recorded in January.
The same percentage (74 per cent) believe consumer prices in general will rise in the coming 12 months, with one in three people (33 per cent) expecting future consumer price increases occurring “more rapidly” than in the past 12 months.
The proportion of people earning more than £50,000 reporting an intention to buy a new car in the next 12 months has dropped from 53 per cent in January 2016 to 42 per cent in January this year.
UK car sales may have peaked last year when they hit a record high in 2016 with figures by the Society of Motor Manufacturers and Traders (SMMT), showing 2.69m new cars were registered in 2016, up 2.3 per cent on the previous year.