Pressure continues to mount on the UK’s motor industry as new car sales fell for the eighth consecutive month with diesel registrations down by almost a third, a new report confirmed.
Despite petrol and alternative-fuel vehicle registrations rising, a 31 per cent dip in diesel demand saw the total new car market fall by 11.2 per cent year-on-year. There was a 33 per cent lift in alternative fuel vehicles but that represents just 2,206 more cars.
Industry representatives said the state of the sector is now a ‘major concern’ with business and consumer confidence being ‘exacerbated’ by the government’s anti-diesel agenda.
Deserted dealerships: New car registrations were down for the eighth month straight in November, dropping by 5% in total
The Society of Motor Manufacturers and Traders (SMMT) confirmed that 163,541 new vehicles were registered last month – that’s 20,560 fewer than November 2016 and the first decrease in the eleventh month since 2011.
The decline was driven by a continued lack of appetite for diesel cars as new measures to tax buyers next year were confirmed by chancellor Philip Hammond last month.
The Budget-announced move to increase first-year tax rates for all new diesel cars from April is the latest in a line of government-backed proposals designed to scare motorists out of diesel as ministers buckle under demands to reduce air pollution in the country.
This ‘demonisation of diesel’, as the SMMT has coined it, saw 27,163 fewer diesel cars being registered last month compared to a year ago – a drop off of 30.6 per cent.
Mike Hawes, SMMT chief executive, questioned the government’s decision to target diesel cars and made it abundantly clear that it was having a negative impact on the nation’s motor industry.
‘An eighth month of decline in the new car market is a major concern, with falling business and consumer confidence exacerbated by ongoing anti-diesel messages from government,’ he said.
‘Diesel remains the right choice for many drivers, not least because of its fuel economy and lower CO2 emissions.
‘The decision to tax the latest low emission diesels is a step backwards and will only discourage drivers from trading in their older, more polluting cars.’
Diesel registrations were down by more than 30% last month, and private car-buying demand dropped by 5%
Philip Hammond confirmed during last month’s Budget that new diesel cars purchased from April 2018 will have to pay a higher rate of first year vehicle tax
Diesel sales have plummeted as talks of toxin taxes have intensified throughout 2017
The new stats confirmed that total new car registrations for the entirety of 2017 so far are now 5 per cent behind what they were at the end of the eleventh month last year.
Car manufacturers had hoped that brand-specific scrappage schemes, which encouraged drivers to trade-in their old cars (mainly diesel) to receive a big discount on a newer, cleaner, model would have boosted dwindling sales figures.
However it appears that drivers are still hesitant to invest in a new motor while the government continues to introduce toxicity taxes.
That’s not to say that scrappage schemes aren’t having an impact on what people are buying – the 10 best sellers in November are somewhat different to the most popular models for the year to date, suggesting brands that have terminated their trade-in incentives early are suffering as a result.
Vauxhall, which ended its scrappage scheme in September, didn’t have a single model in the best-selling cars of November, despite the Corsa and Astra being the fifth and sixth most popular motors of the year so far.
Jeep and Fiat – both of which had scrappage schemes that also ended in September – posted sales dips of 53 per cent and 44 per cent respectively last month.
Despite Vauxhall having two cars in the list of best-sellers for the year to date, neither appeared in the top 10 of most-bought models in November. This could be because Vauxhall no longer has a scrappage scheme while incentives from Ford, VW, MINI and Nissan are available until the end of the year
So where are all these car buyers turning to instead?
A growth in alternative fuel vehicle (AFV) sales of 33.1 per cent might have you think that diesel drivers are now switching to greener alternatives, such as hybrids, plug-in hybrids and full-electric models.
However, this 33 per cent lift represents just 2,206 more AFVs sold last month than a year ago, which is a long way from plugging the gap left by the decline in diesel.
It also means that – even despite this growth of a third – hybrid and electric cars still only make up just 5.4 per cent of new vehicles being bought.
Reacting to the SMMT’s report, RACCars.co.uk spokesman Rod Dennis said: ‘From an air quality perspective, these latest figures are a mixed bag. There is encouraging growth in the alternatively-fuelled vehicles sector but this still represents a fraction of overall sales.
‘The decline in new diesel sales however is stark – while the modest growth in petrol sales shows that some owners may be moving from diesel to petrol, it could also be evidence that diesel drivers are choosing to hold on to their current vehicles for longer when faced with uncertainty over future diesel taxes and charges.
‘We believe drivers need to be offered more incentives to switch into alternatively-fuelled vehicles to encourage swifter uptake of the very cleanest vehicles available.’
The SMMT confirmed it was the first time November sales had fallen since 2011
WhatCar? said just 1% of buyers are interested in an electric car next, despite the government’s attempts to persuade them to use zero-emissions vehicles
Total new-car registrations in 2017 so far are down by 5% – that’s 126,620 fewer vehicles bought than this time last year
New research has suggested that appetite for electric vehicles remains extremely low despite the continued efforts to target diesels and a new government investment of more than £500 million to improve incentives and infrastructure to tempt motorists into zero-emissions models.
In contrast, diesel appetite remains strong.
In the two weeks since Chancellor Philip Hammond’s Budget statement, analysis of new car enquiries by What Car? has shown no immediate downturn in consumer interest in diesels; almost a third (30 per cent) are still considering the fuel type while just 1 per cent are looking to buy an electric car next.
Almost two thirds are looking for petrol powered models, while just 8 per cent are considering hybrid, the motoring title said.
Steve Huntingford, editor of What Car?, said: ‘Right now, it is clear the Government’s strategy to demonise the new, low-CO2 clean diesels rather than introduce a car scrappage scheme to take older, dirtier diesels off the road and protect the CO2 targets, is not having the impact the Chancellor wanted.’
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