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A ‘March’ Better Sales Month!

By Gabby Moore on the 10 April 2017 in Automotive News

In the automotive industry, March and September have always been the months where dealerships gear up to smash Car Sales targets and in March 2017 they did exactly that!

With the government continuing their fight on reducing carbon emissions, April 1st 2017 brought in new car tax regulations. Zero-emission and hybrid vehicles are always going to be at the forefront of their campaign and for the second year running, these vehicles, priced under £40,000 still boast a number of reasons to purchase one; the main reason being – they are free of tax!

However, these types of cars are not for everyone! So, did consumers feel that buying a new car in March 2017 was the best way to still be a part of the old tax bracket? Probably! I mean, who would want to pay more tax for car they buy in April, when they could just buy it perhaps slightly sooner than they wanted and miss out on the new regulations?

Now, this isn’t to say the new tax laws are the only reason consumers have opted to become the owner of a shiny new car! With article 50 being triggered, it is expected that the price of a new car will rise post-brexit. It’s not only the forecasted fluctuations and the apparent instability of the pound; there has been questions raised over the potential increase in costs that the Motor Trade may see, this could have led to an early consumer rush to the tills to ensure they did not see a passed on price increase.

It’s not just the car itself which is going to become an expensive purchase, the cost of running that car is also expected to rise. However, this doesn’t seem to have put consumers off too much as SMMT have recorded that it was also a record month for the sale of diesel models! Is this because diesel cars are going to be hit the hardest with the new tax regulations? Possibly!
So, why now? These figures and the wealth of information surrounding this record sales month could be due to a couple of reasons. It could just be that there are a number of new shapes, sizes and colours of cars (and not to forget the shiny new 17 plate!) to appeal every person and it’s cumulated in a rise of purchases?! I have to admit, I doubt that is the case. I hate to say it but I believe it is more of a ‘fear factor’ which has been instilled into people’s mind-set regarding the weakening currency and the uncertainty of post-brexit Britain.

Could it be that consumers and business are more than likely to rein in their spending, watching their pennies whilst they see higher inflation? Could it be that this is some of the last luxury purchases people will indulge in for a while until they see what the economic future brings?

It will interesting to compare sales figures for March 2017 and March 2018 just to see just how much of an effect the new tax rules and the effect of Brexit have on the automotive industry. Are we looking too much into the ‘record sales month’? Could it just be there is more disposable income in households at the moment? That the UK is well and truly out of the recession? Watch this space…

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