The boom in new car sales is cooling with UK new car registrations up 0.1% in July, according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

A total of 178,523 units were registered in July and figures for the year to date show 1,599,159 new cars have been registered, up 2.8% on the same period in 2015 following a strong first quarter.

July followed the trend seen throughout 2016 whereby lower private registrations were offset by fleet purchases, which increased by 5.0% this month. Demand for alternatively fuelled vehicles remained strong with 24.7% more registrations compared with the same month in 2015.

SMMT chief executive Mike Hawes commented: “After a healthy start to 2016 and record registrations in 2015 the market is showing signs of cooling. The automotive market is a vital part of the British economy and it’s important government delivers the economic conditions which instil business and consumer confidence. With low interest rates, attractive finance options and exciting new models coming to the showrooms, the market still has lots to offer customers.”

Sue Robinson, director of National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers across the UK, said: “Despite expected stabilisation in July, UK new car registrations remain at levels not seen since 2004 with specific segments of the market, including alternative fuel vehicles continuing to perform well.”

Robinson continued: “These figures confirm that overall retail sales are going through a stabilisation period following a positive second quarter in which GDP grew by 0.6% with the services sector up 0.5%.

“It is positive to see that alternative fuel vehicles sales remained strong up 24.7% in July, prompted by various benefits including low running costs, lower rates of Vehicle Excise Duty and financial support offered by the Government.

“Many dealers have experienced an improvement on retail demand in July compared to the immediate post Brexit situation. The UK remains a large market for the EU and performance for the year ahead is expected to be in line with market expectations.”