U.K. Auto Industry Not Rattled By First-Half Slip

New-car sales in the U.K. fell 1.3% to 1,401,811 units from January through June but nevertheless were the second-biggest first half-year on record, and the industry says the overall performance remains strong and on track to meet this year’s forecast.

The Society of Motor Manufacturers and Traders says fleet and business buyers drove demand across the first six months with sales up 1.5% and 2.7%, respectively, in contrast to a 4.8% drop in private purchases, although almost 650,000 consumers have purchased a new car this year.

The half ended with June sales down 4.8% year-over-year at 243,454, the third consecutive month of falling sales, but SMMT says the drop was at a slower pace than in the previous two months.

Demand was stabilizing, SMMT says, after a record first quarter and the subsequent market turbulence caused by changes to the vehicle-excise duty. The market now is more in line with 2017 forecasts, it says.

June sales were down across the private (-7.8%), fleet (-2.4%) and business (-8.3%) sectors. But the alternatively fueled-vehicle (AFV) segment saw notable growth last month, rising 29.0% to 10,721 units for a record 4.4% market share.

Compact cars, typically powered by smaller gasoline engines, proved most popular among all buyers, with super-minis and small family cars accounting for almost 60% of the market. Small family cars and SUVs were the only two segments to register growth in the month, up 6.0% and 11.3%, respectively.

SMMT CEO Mike Hawes says demand for new cars has started to cool as forecast after five consecutive years of solid growth, but the numbers still are strong.

“Provided consumer and business confidence holds, we expect demand to remain at a similarly high level over the coming months,” Hawes says in a statement.

“It’s encouraging to see AFVs experiencing rapid growth, but adoption is still at a relatively low level and more long-term incentives are required if this new generation of vehicles is to be a more common sight on British roads.”

Volkswagen’s Golf led June sales with 8,808 units, ahead of the Ford Fiesta (8,610) and Ford Focus (8,283). But the two Ford models led year-to-date sales, the Fiesta on top with 59,380 units, followed by the Focus (40,045) and Golf (36,703).

Ford Britain says with the all-new Fiesta arriving in U.K. showrooms, sales of the outgoing model introduced in 2008 topped 1 million units in June.

Ford’s first-half car sales were down 1.7% at 168,316 units, but 60,289 better than its nearest rival. Ford’s retail car-sales share in June was 11.1%, 2.8 percentage points ahead of its nearest rival, and year-to-date the share was 12.0%, a lead of 4.4 percentage points.

The light-commercial-vehicle market reported a 3.7% first-half fall in sales, but the 184,926 units sold was 54% higher than five years ago.

Van sales rose 1.8% to 37,349 units in June after four months of falling deliveries.

Pickup sales rose 14.2% to 4,820 units for the month, with the segment reporting positive figures for 17 consecutive months. First-half pickup deliveries were up 18.2% at 27,050 units.