New car sales slump for first time in six years

New car sales slump for first time in six years
Industry figures show a “very volatile year” has dragged down new car sales across the board – with under-fire diesel models taking the biggest hit in 2017.

Overall sales fell 5.7% on a year-on-year basis, with demand for diesel vehicles showing a pronounced decline of 17%.

According to figures compiled by the Society of Motor Manufacturers and Traders (SMMT), 2.54 million new cars were registered last year, marking a drop from 2.69 million in 2016 – the first fall in sales in six years.

READ MORE: UK new car market declines as Europe picks up slack

Petrol registrations fell by 2.1% in December, but were up 2.7% for 2017.

Diesel cars took the hardest hit, with sales tumbling by 31% last month alone following November's Budget announcement there will be a tax hike on new diesel cars sold from April 1.

In the plans, Chancellor Philip Hammond said a one-band increase in the first-year vehicle excise duty (VED) rate is set to come in to place for models which don’t comply with RDE2 criteria – amid wider plans to ban the sale of all new conventional diesel and petrol cars by 2040.

SMMT chief executive Mike Hawes said: “Confusing anti-diesel messages have caused many to hesitate before buying a new low emission diesel car.”

He added that mixed signals have left consumers “just sitting on their hands” instead of opting to choose an alternative vehicle.

Mr Hawes also forecasts the market will continue to decline in 2018 with registrations falling by around 5-7%.


He said the “very, very volatile year” was prompted by “a drop in both business and consumer confidence” – adding continuing uncertainty over Brexit has dragged down manufacturer confidence.

Mr Hawes warned there could be further problems ahead if a decision fails to be reached as manufacturers put “contingency plans” in place which could potentially harm UK operations funding.

The market share of diesel vehicles has fallen by 6% since last year to hold around 42%, with alternatively-fuelled cars up to a record 4.7%.

Mr Hawes insisted that despite the falling figures, 2017 marks the third highest year for car registrations over the last decade with record numbers reported from 2015 and 2016.

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