For the eleventh successive month, new car
registrations fell in May, to 150,431 units, though the 1.7%
decline was the smallest since registrations began to contract in
July last year, the SMMT reports.

There were 66,923 fewer registrations over the
first five months of 2011 compared to 2010, a 7.3% decline to
846,513 units. The 12-month moving annual total was 1,964,000 units
in May, down more than 195,000 units from a year ago. SMMT,
however, forecasts the market to stabilise in Q3 and predicts the
full-year total will reach 1,930,000.

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According to SMMT, the market is suffering
from economic uncertainty, with consumer confidence dampened by
concerns over employment, low wage growth and rising living costs.
The effects of the scrappage scheme have almost disappeared – only
4,000 cars went through the scheme in May 2010 and just 1,500
collectively in June and July 2010, compared with over 100,000
units in the first four months of last year.

Private demand continued to fall, down 15.3%
in May and by 18.9% over the year-to-date. However, total market
volumes were supported by fleet demand, which rose by 11.1% over
the month.

Diesel cars accounted for 52.9% of May’s
market, up from 46.9% last May, after a 10.7% rise in volumes. VW’s
Golf was the month’s best-selling diesel model, with the Ford
Fiesta the top-selling car overall.

Registrations of Supermini cars grew for the
first time since June 2010. Executive, luxury saloon and dual
purpose cars had the month’s best growth rates.

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SMMT chief executive Paul Everitt said: “Consumers remain
cautious, but with significantly improved fuel economy, service
plans and more affordable finance, there is great value on offer
across the market.”