The precipitous decline in car sales seems to have been arrested with a 10pc rise in new car registrations in April - but the industry is warning that it is an anomaly.
Early figures on sales of new cars during the month posted a big rise after 12 successive months of decline.
According to provisional data collated by the Society of Motor Manufacturers and Traders (SMMT), 168,000 new cars were registered in April, compared with 152,000 in the same month last year.
In the first three months of 2018, sales were down 12.4pc as motorists backed away from splashing out on cars. A combination of confusion over government policy towards diesel vehicles and economic uncertainty related to Brexit was blamed for the fall.
However, sales in the first three months of last year were boosted by drivers rushing to beat the introduction of new Vehicle Excise Duties (VED) which came into force in after March.
This meant that sales in April 2017 were abnormally low as the new VED rules “pulled forward” sales into the first three months of the year.
Some of Britain’s biggest car dealers cautioned against thinking that the sales boost for April marked a “new normal” for the UK car market.
“This April’s figures are flattered by soft comparisons for last year,” said Daksh Gupta, chief executive of Marshall Motor Group. “It’s not a new normal.”
He added that the way the calendar falls with Easter meant that this year there were more selling days, flattering the performance.
“I’m quite surprised at the 10pc increase - according to our calculations that means the industry is at about 9pc up for the year to date,” Mr Gupta said. “It suggests that the market for the full year could be down only 2pc or 3pc on last year - which was down 5.6pc on the previous year’s sales of 2.7m, which was an all-time record.”
Trevor Finn, chief executive of dealer group Pendragon, said the impact of VED changes had skewed the previous year’s figures so much that the comparison was meaningless.
“Look at April of 2016 - which was an all-time record - to get an idea of what’s going on in the market,” he said, referring to the 189,000 cars sold in the same month two years ago.
Mr Finn added that the whole of the first half of 2017 was “so distorted by VED” that it is far too early to get a clear a picture of the true state of car sales.
He added: “April’s sales might be a step back to normality but it’s only a step. It’s not that the market’s current size is the difficulty, it’s the size of the correction that is the difficulty.”
The SMMT’s early figures - which will be adjusted as final numbers on registrations come in - showed that sales of petrol cars rose by almost 40pc on an annual basis to 107,000 in April, while diesel slumped by 25pc to 50,000, with alternatively fuelled vehicles such as electric and hybrid cars enjoying a sales surge of 50pc to 9,000 in the month.