New car sales fall for tenth month in a row

New car sales fall for tenth month in a row
New car sales fall for tenth month in a row

The UK new car market declined in the first month of the year, continuing a trend that saw 2017 become the first time in six years new car sales fell year-on-year.

Last month’s 6.3 per cent fall compared with January 2017 represented the tenth consecutive month that new car registrations dropped in the UK, with overall sales of 163,615.

The continued decline was revealed in figures released by the Society of Motor Manufacturers and Traders (SMMT). They showed that, once again a rise in sales of petrol and alternatively fuelled vehicles [AFVs] was cancelled out by a heavy fall in diesel sales.

Petrol sales were up 8.5 per cent and AFVs up 23.9 per cent but diesel car sales dropped 25.6 per cent, with the SMMT blaming confusion over government policies towards diesel for buyers’ reluctance to opt for the fuel. Overall last year diesel sales fell 17 per cent while petrol rose 2.8 per cent and AFVs jumped almost 35 per cent.

“At the moment there doesn’t feel like enough urgency to connect with car owners to explain their purchasing choices across petrol, Euro 6 diesels and AFVs”

Alex Buttle, Motorway.co.uk

Hesitation

Mike Hawes, SMMT chief executive, said, “The ongoing and substantial decline in new diesel car registrations is concerning, particularly since the evidence indicates consumers and businesses are not switching into alternative technologies, but keeping their older cars running.

“Given fleet renewal is the fastest way to improve air quality and reduce CO2, we need government policy to encourage take up of the latest advanced low emission diesels as, for many drivers, they remain the right choice economically and environmentally.”

Alex Buttle, director of car buying comparison website Motorway.co.uk, called on the Government to do more to educate buyers about their choices, claiming that the beleaguered diesel segment was dragging the market down.

He said: “Take diesel out of the equation and the picture doesn’t look anywhere near as bleak. Petrol and AFVs [alternatively fuelled vehicle] sales are actually up, as they were in December.

“Unfortunately, the rise in petrol, hybrid and electric sales can’t compensate for the 25 per cent fall in diesel sales.

“If the car industry is to recover by 2019, the Government needs to consider putting its full backing behind AFVs. It also needs to do more to educate consumers about their options.

“At the moment there doesn’t feel like enough urgency to connect with car owners to explain their purchasing choices across petrol, Euro 6 diesels and AFVs. Although hybrid and electric sales are rising, we are still talking about small numbers when compared to petrol sales.

Incentives

“And if a meaningful switch away from fossil fuels is to occur, there needs to be financial incentives for consumers to switch to hybrid and electric vehicles now, not in 10 years. Generous subsidies for AFV car purchases feel long overdue.”

James Hind, founder and CEO of car buying site carwow, also called for more clarity on the issues surrounding diesel cars. He said: “There’s no doubt – the industry is working hard. Manufacturers have looked to jump start sales in 2018 through a series of limited time offers in a bid to get a fast start to the year.

“Kia, Seat, Volkswagen and Honda all had very attractive January-only offers in an attempt to stimulate a very tough market [and] Jaguar, Land-Rover, Renault and Vauxhall all did the same for part of the month.

“These incentives are no surprise given the general retail slow down. However, while the industry is pulling out all the stops it’s clear the industry continues to be hindered by lack of clarity on diesel and the delay in implementing the electric car charging infrastructure promised in the Budget.

“It’s evident that motorists are voting with their feet. Our recent report in the market showed that a staggering one in five admit that until guidelines on both petrol and diesel become clear, they’ll hold off on purchasing a new car.”

Simon Benson, head of motoring services at AA Cars, added: “This data is the first real temperature test of the overall health of the new car industry in 2018, and it paints a fairly bleak picture.

“With the market now in its 10th month of decline, motorists are clearly wary about purchasing a new vehicle. In fact, our own research suggests a lack of consumer confidence cost the industry an estimated £2.6 billion in 2017 alone.

“Only time will tell whether this trend will continue into March, marking a full year of falling sales. The government needs to act now to incentivise new car buyers back to forecourts before this decline causes real damage.”

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