Diesel downturn takes its toll on UK new car market

The UK’s new car market weakened in the first month of 2018, according to statistics announced by the Society of Motor Manufacturers and Traders (SMMT).

163,615 cars were driven away from dealerships in January, a -6.3% decrease compared with January 2017. Demand plummeted industry-wide, with registrations by private, fleet and business consumers down -9.5%, -1.8% and -29.7% respectively.

In the meantime, carrying on the trend of the last few months, sport utility vehicles (SUVs) were the only car segment to see a rise, with growth up 6.6% – accounting for a fifth of all new car registrations. Demand everywhere else dropped, with the greatest falls impacting the mini, MPV and executive areas of the market.

Elsewhere in the automotive arena, registrations of alternatively fuelled vehicles (AFVs) and petrol cars climbed 23.9% and 8.5% respectively. However, this boost didn’t make up for the substantial decline in demand for new diesel cars. This area of the market tumbled by -25.6% as uncertainty over government policy continued to cause consumers to hesitate.

Latest SMMT statistics highlight the importance of diesel to the British economy. In 2017, over two in five of the cars leaving UK production plants were diesels. Furthermore, automakers made over 1 million engines – supporting 3,350 jobs and, along with Britain’s petrol engine production, delivering £8.5 billion to the economy.

Mike Hawes, SMMT Chief Executive, commented: “The ongoing and substantial decline in new diesel car registrations is concerning, particularly since the evidence indicates consumers and businesses are not switching into alternative technologies, but keeping their older cars running.

He added: “Given fleet renewal is the fastest way to improve air quality and reduce CO2, we need government policy to encourage take up of the latest advanced low emission diesels as, for many drivers, they remain the right choice economically and environmentally.”