Vertu Motors warns of volatility in new car market despite ‘positive’ trading

Vertu chief executive Robert Forrestor said he was "pleased to report that trading remains positive" despite concerns over the ZEV mandate.

Vertu Motors has reported “positive” quarterly trading and expects to meet full-year expectations after both new and used car sales grew in the three months to June.

New car retail and Motability, Vertu’s leasing segment, saw like-for-like volume growth of 6.8 per cent, alongside fleet and commercial growth of 6.4 per cent. Used vehicle volumes grew 6.7 per cent.

Vertu chief Robert Forrestor said he was “pleased to report that trading remains positive.”

“Used car pricing has remained stable and we have gained market share in the new retail and Motability car market and delivered strong like-for-like volume growth in used vehicles.  The performance of our high margin aftersales business has remained strong.”

But the Tyne and Wear-headquartered firm warned that looming new rules on electric vehicle (EV) sales in the UK had the “potential to create volatility in the new car market.”

The so-called Zero Emissions Vehicle (ZEV) mandate was introduced in January and requires car manufacturers to ensure a certain proportion of vehicles are electric, or face hefty fines.

In a statement to markets, Vertu Motors said the ZEV would results in a “reduced supply” of new petrol and diesel cars in the coming periods, leading to a strengthening of petrol and diesel used car values.

CEO Forrester has said in the past the new rules have the potential to put the car making industry “underwater” due to a lack of consumer demand for greener models.

Shares in Vertu Motors are up over seven per cent in the year to date.