DIESEL SUF­FERS AS NEW CAR SALES FALL AGAIN

The Scotsman - - Motoring/News -

New cars sales in the UK have fallen for the third month in a row as the mar­ket con­tin­ues to feel the ef­fects of tax changes and po­lit­i­cal and eco­nomic un­cer­tainty.

New reg­is­tra­tions dropped by 4.8 per cent in June, ac­cord­ing to data from the So­ci­ety of Mo­tor Man­u­fac­tur­ers and Traders (SMMT) - a slower de­cline than in the pre­vi­ous two months.

Diesel sales bore the brunt of the fall again, down 14.7 per cent while petrol sales grew 2.5 per cent and al­ter­na­tive fu­elled ve­hi­cles soared by 29 per cent.

The con­tin­ued back­lash against diesel as well as eco­nomic un­cer­tainty caused by Brexit and the Gen­eral Elec­tion have been blamed for the de­cline in sales, along with changes to ve­hi­cle ex­cise duty in April that pushed up the run­ning costs of most new cars.

The SMMT said the lat­est fig­ures showed a sta­bil­i­sa­tion in the mar­ket after a record first quar­ter and two months of dra­matic de­cline but some com­men­ta­tors have warned that the dropoff could con­tinue.

Mike Hawes, SMMT chief ex­ec­u­tive, said: “As fore­cast, de­mand for new cars has started to cool fol­low­ing five con­sec­u­tive years of solid growth but the num­bers are still strong and the first half of the year is the se­cond big­gest on record.

“Pro­vided con­sumer and busi­ness con­fi­dence holds, we ex­pect de­mand to re­main at a sim­i­larly high level over the com­ing months.”

How­ever, John Leech, head of au­to­mo­tive at KPMG UK was less op­ti­mistic.

He said: “The drop in sales sig­nals the soft­en­ing in con­sumer con­fi­dence that has been seen more widely in the econ­omy this year, and is in part a re­flec­tion of a de­cline in house­hold in­come and re­cent po­lit­i­cal un­cer­tainty.

“Look­ing to Europe, the ma­jor mar­kets of Ger­many, France and Italy are per­form­ing strongly and this, cou­pled with ster­ling’s weak­ness, is caus­ing ve­hi­cle man­u­fac­tur­ers to re­duce UK in­cen­tives and vol­ume ex­pec­ta­tions.

“As these head­winds con­tinue to im­pact the UK mar­ket we fore­cast a five per cent de­cline in the new car mar­ket dur­ing the se­cond half of 2017.”

A to­tal of 243,454 new cars were reg­is­tered in June, with su­per­mi­nis and small fam­ily cars ac­count­ing for al­most 60 per cent of the mar­ket. The data shows that small fam­ily cars and SUVS were the only two seg­ments to reg­is­ter growth in June, up six per cent and 11.3 per cent re­spec­tively.

VW’S Golf fi­nally ended the Ford Fi­esta’s reign at the top of the best­seller list, but only by 208 units. And the Fi­esta re­mains the best seller over­all for the year to date.

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