Diesel drops by 20 per cent as registrations fall again

William Scholes
05 June, 2017 12:20

PRE-ELECTION nerves are being blamed for a slump in new car registrations in May which has seen diesel sales fall by one fifth..

The Society of Motor Manufacturers and Traders, a trade body, said that demand in the UK had fallen by 8.6 per cent, with 186,265 cars registered.

Northern Ireland registrations fell even harder, however, dropping back 9.4 per cent compared to May 2016's tally.

The Volkswagen Golf was Northern Ireland's favourite car in May, with 140 examples registered.

Hyundai's Tucson, with 132 registered, and Nissan's Qashqai, with 119 registrations, were the next most popular vehicles in the north.

May's performance follows April's 29.1 per cent slide in Northern Ireland and 19.8 per cent for the UK market as a whole.

Despite two consecutive disappointing months, the UK new car market is down by just 0.5 per cent in the year-to-date compared to the same period in 2016, though Northern Ireland is trailing further and is down by 5.8 per cent.

This is due to a record-breaking March for the industry, as buyers rushed to register new vehicles ahead of a new - and more costly - car tax system being introduced in April.

Sales of hybrids and electric vehicles have grown, however, and accounted for 4.4 per cent of the total market - equivalent to 8,258 cars - in May.

One reason that they have been able to buck the generally downward trend is because of the way that the new car tax regime favours vehicles which have lower carbon dioxide emissions.

Alternatively-fuelled cars routinely record low CO2 figures, allowing their owners to benefit from lower car tax and, if they are business users, a lower rate of benefit in kind tax; business purchases were up by 20.1 per cent in May, while private and fleet sales fell.

Sales of diesel-fuelled cars have been hit especially hard. Diesel registrations in May were down by 20 per cent compared to the same month last year. In May 2016, half of new cars were diesel; last month, this had falled to 43.7 per cent.

Fears over the prospect of the government penalising diesel car owners with a new 'pollution tax', environmental concerns and the continued knock-on effects of the Volkswagen Group's emissions cheating. as well as the improved economy of petrol engines, are among the factors which have contributed to diesel's fall from grace.

A similar pattern is being repeated all over Europe, with diesel registrations across the continent falling by 15 per cent in April.

SMMT chief executive Mike Hawes said new car demand had been expected to "remain negative" in May due to the knock-on effect of March's record month.

"Added to this, the general election was always likely to give many pause for thought and affect purchasing patterns in the short term," he said.

"Although demand has fallen, it's important to remember that the market remains at a very high level and, with a raft of new models packed with the latest low emission and connected technology coming to market this summer, we expect the market to remain strong over the year."

05 June, 2017 12:20 Motors