UK car sales flat in July, but signs of a consumer slowdown

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LONDON, Aug 4 (Reuters) - British car registrations were flat in July but demand from private consumers fell for the fourth month in a row suggesting a hit to confidence, data for the first full month since Britons voted to leave the European Union (KSE: 000910.KS - news) showed on Thursday.

Sales rose 0.06 percent year-on-year to 178,523 units with a rise in business demand for fleet vehicles compensating for a 6 percent drop in demand from members of the public.

Car (HKSE: 0699-OL.HK - news) deliveries typically occur several weeks after purchase decisions so there is normally a lag in recording any changes in demand which may delay any Brexit vote effect.

The Society of Motor Manufacturers and Traders urged the government to support demand in Europe's second-biggest autos market.

"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," CEO Mike Hawes said.

Sales fell in June, only the second time since 2012, and the industry narrowly avoided a decline in sales last month, which would have been the first time demand had fallen for two consecutive months in a row in four and a half years.

One of Britain's biggest selling brands, Volkswagen (Xetra: 766400 - news) , saw its sales fall 9.5 percent in July, the ninth month out of the last ten in which VW's sales have dropped since the emissions scandal broke at the end of September.

Around four in five car purchases in Britain are made using cheap credit where buyers effectively rent a new car - typically for three years - before trading it in for a new model using a scheme known as a personal contract plan (PCP).

But Samuel Tombs, Chief UK economist at Pantheon Macroeconomics, suggested that a surge in car sales in recent years driven by low interest rates was coming to an end.

"Uncertainty about the economic outlook is making consumers cautious to purchase big-ticket discretionary items," he said.

(Reporting by Costas Pitas; editing by Andy Bruce and Giles Elgood)