According to the latest industry figures, while an increase in new car sales was still evident in May, the growth rate slowed to 2.4 per cent.
The fall in growth is highlighted when the 2.4 per cent figure is compared with last March’s, when car sales were growing at a rate of 17.7 per cent.
During the last few years, double-digit growth has been the norm for the industry, and the manufacture and sale of new cars has been one of the key trades behind the UK’s economic recovery to date.
There is a clear two per cent drop in sales growth when the seven per cent figure for April to May (185,778 to 198,706 sales) this year is compared with the nine per cent figure recorded during the same period 12 months ago (176,820 to 194,032 sales).
While experts have viewed the news as a minor setback for the UK’s economic recovery, analysts reportedly remain hopeful that growth will continue, even though it is likely to be at a lower rate.
Car sales had previously risen for 39 consecutive months, and any potential increases in the future will be made more difficult by an already high base level.
However, the low cost of oil and an increase in household incomes is expected to ensure the industry’s future remains promising.
It is also hoped that exports will grow over the next few months, especially as other countries in the EU are starting to witness economic recovery and are more likely to import UK-built vehicles.