Tag Archives: Car Sales

Has the UK’s demand for cars run out of gas?

Simon Kirby, Andre Moreira and Michal Stelmach

New car registrations, a timely indicator of the cyclical position of the economy, fell in 2017 for the first time since 2011. Some have attributed this drop to tax changes which took effect last April. But we think the squeeze on real incomes was a more significant factor. Our analysis also suggests that the rapid growth in new car sales seen from 2013-16 was unlikely to be sustained. Given the expected path of household income we expect new car purchases to remain subdued in 2018, compared to levels seen in recent years.

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