Carole Nash
Content Writer
Published: 7th March 2018

Recent statistics for UK car sales showed a drop, which continued throughout February. According to research carried out by the Society of Motor Manufacturers and Traders (SMMT), sales fell by 2.8% compared to February 2017. This steadied the decline after a 6.3% year-on-year drop in January. 80,805 new cars were registered, which dropped from 83,115 in February 2017. A reason for this is likely because of the general quietness of February, due to buyers holding off on switching motors until the number plate change happening in March.

The drop in sales can be attributed to the unpopularity of diesel cars, with purchases falling 24% year-on-year. Compared to diesel cars, petrol-based models sold better, with sales up more than 14% from February 2017. Small models led to an increase in sales, such as the latest Ford Fiesta. 36% of car owners still have diesel vehicles and according to the SMMT it’s “a disappointing performance given the latest low emission vehicles can help address air quality issues.”

The SMMT are expecting a further year-on-year decline in March, due to the fact that buyers were rushing to get new cars registered before an increase in vehicle excise duty in April 2017. Mike Hawes, SMMT chief executive, has given his thoughts. “Looking ahead to the crucial number plate change month in March, we expect further softening, given March 2017 was a record as registrations were pulled forward to avoid VED changes.”

So far in 2018, the UK new car market has dropped by 5.1%, which has been felt in the business (29.8%), private (7.1%) and fleet buyer (2.1%) sectors. This follows on from the market showing a decline for the first time since 2011 last year.

The chief economic adviser of the EY Item Club, Howard Archer has given his opinion on the market. “Car sales are likely to be hampered by mounting pressure to restrict car finance deals and unsecured consumer credit. The Bank of England has shown mounting concern over this and is keen for a more responsible approach to be adopted. This is magnified by concerns over the resale value of cars at the end of PCP deals.”

Car industry officials expect the demand for new cars to decrease by 5% to 7% in 2018 and recover in 2019 because of Brexit uncertainty and the government’s diesel policy.