UK sales of new cars fell for an eighth consecutive month in November as economic uncertainty and a sharp fall in demand for diesel cars weighed on demand.
Sales slumped by 11.2% last month to 163,541 vehicles, putting the industry on course for the first drop in annual sales since 2011. New car sales in the first 11 months of 2017 were down by 5% at 2.39m.
The November decline was driven by a 30.6% fall in diesel sales according to the Society of Motor Manufacturers and Traders, which more than offset a 5% rise in petrol and 33% rise in alternatively fuelled vehicles.
Companies cut back on new cars the most, with business registrations slumping by 33.6%. Private registrations declined by 5.1%, while fleet registrations dropped by 14.4%.
“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,” said Mike Hawes, the chief executive of the industry trade body.
“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.
“Given fleet renewal is the fastest way to improve air quality, penalising the latest, cleanest diesels is counterproductive and will have detrimental environmental and economic consequences.”
Chris Bosworth, the director of strategy at Close Brothers Motor Finance, said the November slump in sales also reflected uncertainty over the UK’s future outside the EU, which is making consumers more reluctant to commit to major spending decisions. “Brexit is having an obvious impact on the market as a whole as consumer confidence remains low,” he said.
Household finances are under pressure from falling real pay, as prices rise faster than wages following the sharp fall in the value of the pound triggered by the Brexit vote in June 2016.
Falling demand for new cars ends five years of growth in the market, fuelled by cheap finance deals and compensation payouts where payment protection insurance was mis-sold.
The new car industry in the UK is now lagging behind the rest of Europe, where car sales are rising.
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