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Sales of new cars fall as UK consumers continue to shun diesel

Sales of new cars fell last month as UK consumers shunned diesel vehicles and Brexit chaos deterred buyers in what is traditionally a strong month for the industry.

The number of new car registrations fell by 3.4% to 458,054 in a crucial plate change month that usually encourages buyers into showrooms. It was the lowest number for March in six years.

“March is a key barometer for the new car market, so this fall is of clear concern,” said Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, which published the figures.

“We urgently need an end to the political and economic uncertainty by removing permanently the threat of a no-deal Brexit and agreeing a future relationship that avoids any additional friction that would increase costs and hence prices.”

Diesel cars continued to lose favour with UK buyers, falling 21% in March, while sales of petrol cars and alternatively fuelled vehicles both rose, by 5% and 8% respectively. Sales to consumers fell 2.3% but business sales plunged 45%, although they account for a much smaller proportion of overall sales. Fleet sales rose by 0.3%.

In the first quarter overall, new car sales were down 2.4% compared with the same period last year, at 701,306.

Howard Archer, the chief economic adviser to the forecasting group EY Item Club, said that although the March figures were “hardly great”, they could have been worse, given the recent run of weakness in the car industry.

However, he said the underlying picture could be worse than the headline figures suggest as some buyers may have brought forward purchases to avoid any potential price rises had the UK left the EU on 29 March as originally planned.

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“There are indications that March’s sales were lifted by appreciable pre-registering of vehicles before the end of March when Brexit was due to occur,” Archer said. “This could well reflect an element of concern of what would happen to car prices and supplies if there was a no-deal disruptive UK exit from the EU at the end of March or in mid-April. If this was the case, it will likely weigh down on car sales in April at least.”


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