Continuing drop in new car sales prompts hope amid gloom

1:02 pm, December 5, 2017

TODAY’S announcement about the continuing fall in sales of new cars has been met with optimism amid the gloom.

The Society of Motor Manufacturers and Traders reported a total of 163,541 vehicles registered last month, down 11.2 per cent year-on-year, driven by a 30.6 per cent fall in diesel demand, making November the eighth consecutive month of decline.

Alternatively fuelled vehicles made a huge gain, though, growing by 33.1 per cent, while petrol cars saw a gain of five per cent.

Richard Jones, the managing director of Black Horse, which is one of the UK’s leading motor finance providers, said: ‘These figures show the new car market continues a trend of moving to a more sustainable position.

‘This further correction in sales will be beneficial for the market in the long term and runs counter to recent concerns of the influence of a potential oversupply of vehicles on used car values.’

Nathan Coe, Auto Trader chief operating officer, said: ‘2017 has been a challenging year for the new car market, with Brexit continuing to cast a shadow over consumer confidence, exchange rates impacting on the profitability of UK new car sales and the effect of the ongoing demonisation of diesel only serving to confuse consumers and hamper production plans for manufacturers.

‘However, whilst the new car market is slowing, there remains great opportunity within the used car market – a market that is three times larger than that of the new car market. As we’ve seen on our marketplace, retailers that ensure their cars are in front of the most buyers, use data to inform their stocking and pricing strategy and offer a customer-centric buying experience are consistently outperforming the market.’

But Simon Benson, director of motoring services at AA Cars, said: ‘The SMMT warned last month that if the government failed to intervene, the new car market would continue to suffer, and sadly that proves to have been the case today. Anyone holding out for a confidence boost from the Budget will have been sorely disappointed, as the chancellor’s statement only served to further exacerbate the problem.

‘The decision to increase the first-year VED rate on diesels that don’t meet the standards for next-generation clean diesels puts even more pressure on consumers and manufacturers in a year that has already dented the market. What consumers really need now is clarity.’

Sue Robinson, director of the National Franchised Dealers Association, said: ‘The new car market is now year-to-date five per cent down on last year, in line with initial forecasts. While alternative-fuel vehicles continued to grow significantly, registrations of new diesel cars showed a consistent decline as a consequence of recent media coverage and government’s announcements.’

RAC Cars 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.’