January new car sales down -6.3 per cent

The UK new car market declined in the first month of the year, according to figures from the Society of Motor Manufacturers and Traders (SMMT). 163,615 cars were driven off forecourts in January, a -6.3 per cent fall compared with the same month in 2017.

Demand fell across the board, with registrations by business, private and fleet buyers down -29.7 per cent, -9.5 per cent and -1.8 per cent respectively. Meanwhile, continuing the trend of recent months, dual purpose cars (SUVs) were the only vehicle segment to see growth, with demand up 6.6 per cent to account for a fifth (20.2 per cent) of all new car registrations. Demand in all other segments fell, with the biggest declines affecting the mini, MPV and executive segments.

Elsewhere in the market, registrations of petrol and alternatively fuelled vehicles (AFVs) rose, up 8.5 per cent and 23.9 per cent respectively. However, this growth failed to offset a significant decline in demand for new diesel cars, which fell -25.6 per cent as confusion over government policy continued to cause buyers to hesitate.

Latest SMMT figures illustrate the importance of diesel cars and engines to the UK economy. Last year, more than two in five of the cars leaving British production lines were diesels, while manufacturers also produced more than 1 million engines – directly supporting some 3,350 jobs and, combined with the UK’s petrol engine output, delivering some £8.5 billion to the economy.

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.”

There was a note of optimism from Sue Robinson, director of the National Franchised Dealers Association (NFDA): “The new car market continues to perform in line with expectations, down -6.3 per cent in January. On the used vehicle side, franchised retailers continue to see a buoyant market, which is worth over £65 billion a year.”

Robinson continued, “The sector performed extremely well in last year’s first quarter thanks to a number of factors including the new vehicle excise duty which came into force in April which explains this correction in the market.

“The alternative fuel vehicle market continues to grow, up 23.9 per cent in January. The increase in petrol sales indicates that many motorists are switching fuel type from diesel to petrol, although depending on the type of driver Euro 6 modern diesel may still represent the most efficient option.

“Going forward, it is critical that consumers are supported by consistent, clear information to help them make informed purchasing decisions.”