Eleventh consecutive month of decline for UK car market as diesel sales crash

5 March 2018

The UK new car market has suffered another monthly decline, with diesel sales hit hard during February.

According to new figures released today by the Society of Motor Manufacturers and Traders (SMMT), last month saw the country’s registrations dip by 2.8% compared to February 2017. While the start to the year has been disappointing, figures for the first three months of last year were higher than normal, due to new vehicle excise duty (VED) rules being implemented in April 2017.

February is traditionally a quiet month, as buyers prepare to spend on new plate vehicles introduced in March. In January, new car sales were down 5.3%. Therefore a 2.8% drop is an improvement, although the current year is still 5.1% down over the first two months. Overall, 80,805 units were sold.

Demand for petrol vehicles rose during February, with a 14.4% growth in sales, 48,941 vehicles registrations in total, compared to 42,787 in 2017. Alternatively fuelled vehicles, including electric and hybrid cars, saw sales up by 7.2%.

However, these totals were not enough to offset another large decline in diesel sales, with a 23.5% drop compared to the second month of 2017. This is comparable with January, which saw sales of the fuel decline by 25%. In total, diesel is down by 24.9% over the first two months of the year, with a 35.6% market share.

In a statement, the SMMT said it believes this is a disappointing performance, given the latest low emission vehicles, including diesel, can help address air quality issues. Last year saw the first rise in CO2 levels in the UK for 20 years. The drop in sales is before a new VED rise in the first year of registration for new diesel vehicles from April, with the market expected to see another large drop from then onwards.

Registrations by business, private and fleet buyers year-to-date are all down, 29.8%, 7.1% and 2.1% respectively.

Commenting on the figures, Mike Hawes, SMMT Chief Executive, said: ′Although the new car market has dipped, it remains at a good level despite the drop in demand for diesel. Consumers should be reassured, however, that the latest cars are the cleanest in history and can help address air quality issues, which is why they are exempt from any restrictions.

Looking ahead to the crucial number plate change month of March, we expect a further softening, ′given March 2017 was a record as registrations were pulled forward to avoid VED changes.’

The decline in the new car market is not being matched with used car sales, where it seems those wanting a diesel vehicle are turning to. During 2017, the market declined by just 1.1%, although diesel sales rose by 3.3% across the 12 month period.