Business

Demand for new cars dropped 16 per cent in March

The new car market continues to decline in the UK as demand for diesels plummets, industry figures show

THE new car market continues to decline as demand for diesels plummets, industry figures show.

Preliminary figures for March show that new car registrations fell by around 15.6 per cent year-on-year, according to the Society of Motor Manufacturers and Traders (SMMT).

This was driven by a fall of just over 37 per cent in the number of new diesel cars bought.

Registrations of petrol cars rose by almost 1 per cent, while demand for alternatively fuelled vehicles such as hybrids and pure electrics increased by around 5.7 per cent.

The overall market fell by approximately 12 per cent in the first quarter of the year.

The SMMT had predicted a "softening" of new car sales last month as March 2017 saw a record high for registrations due to many motorists buying cars before changes to vehicle excise duty came into effect.

But Jim Holder, editorial director of What Car? magazine, said low consumer confidence and uncertainty around the future of diesel vehicles "continue to have an impact".

It is "pertinent" that the ongoing drop in diesel sales is not matched by equivalent rises in sales of petrol and electrified cars, he said.

"Buyers don't believe that petrol or electrified cars can deliver the performance or economy benefits they need, and so they are holding on to older vehicles for longer," he said.

"That evidence would suggest once again that the Government would do well to clarify its position on diesels and to stimulate people into buying newer, cleaner cars."

Mr Holder added that the sales figures were "not that negative" as it was still the fourth best March on record.

All new diesels have been subjected to a one-band increase in the first-year vehicle excise duty rate since Sunday.

Plans have also been unveiled to ban the sale of all conventional diesel and petrol cars by 2040.

Justin Benson, head of automotive at auditors KPMG UK, said: "Much like businesses, consumers are currently in the wait and see camp wanting certainty around the economic environment.

"Brexit, concerns over inflation above earnings growth and the Bank of England's hints that they will raise interest rates in the near future are all causing consumers to hold back.

"If you are in the market for a new car you should drive a hard bargain."

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