Diesel slide continues as UK car sales fall for 11th month running

Slumping demand for diesel vehicles dragged down new car sales in February, marking the 11th consecutive month of declines for Britain’s new car market.

The number of new cars registered dropped 2.8% compared to the same month a year ago to 80,805, according to industry trade body the Society of Motor Manufacturers and Traders (SMMT).

Sales of diesel cars fell by 23.5% to 28,317 last month, reducing their share of the market to 35% from 44.5% a year ago.

February is usually a quiet month before the number plate change in March, when around a quarter of all cars are registered every year.

However, the SMMT is expecting a further year-on-year drop in March, as this time last year buyers were rushing to get their new cars registered before an increase in vehicle excise duty in April 2017.

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Mike Hawes, the SMMT chief executive, said: “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 sharp decline in diesel sales suggests that owners are keeping their old cars longer, the SMMT said. It described the slump in diesel demand as “disappointing”, given that the “latest cars are the cleanest in history and can help address air quality issues”.

Demand for secondhand diesels has also plummeted since the Volkswagen emissions scandal erupted in September 2015. A third of VW cars that had been equipped with devices to cheat emissions tests remain unfixed.

Sales of petrol cars rose 14.4% in February, taking their market share to 60.6% from 51.5%. Sales were boosted by new smaller models coming onto the market such as the latest version of the Ford Fiesta and the US carmaker’s new SUV EcoSport.

Sales of electric and hybrid vehicles also continued to climb, rising 7.2% in February.

So far this year, the UK new car market has declined by 5.1%, with registrations by business, private and fleet buyers all down – by 29.8%, 7.1% and 2.1% respectively.

The new car market declined last year for the first time since 2011, bringing an end to a boom that had been fuelled by cheap finance and personal contract plans (PCP), which now account for more than 80% of all of new car registrations.

Howard Archer, the chief economic adviser to the EY Item Club, said: “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 adapted. This is magnified by concerns over the resale value of cars at the end of PCP deals.”

Britain’s car industry body expects demand for new cars to fall by a further 5% to 7% this year before recovering next year, amid uncertainty caused by Brexit and the government’s diesel policy.