Car sales dented for another month

L Decline not as bad as recent falls but diesel sales stuck in slow lane

trend for new car sales. Essentially, people are keeping their cars for longer as they put off buying decisions.

“The government should play a vital role to help the industry rebuild trust and create more certainty for the consumer by focusing on ‘tailpipe’ emission targets and robust testing arrangements, instead of stating the technology by which they should be attained.”

Howard Archer, chief economic advisor to the EY Item Club, said the sector would “only take limited consolation” from the fact that January’s decline was less than in previous months.

He noted: “January’s 9.5 per cent drop in private sector car sales points to squeezed, uncertain consumers being reluctant to make major purchases. 2018 looks set to be another challenging year for new car sales with a further drop of 5 per cent or more highly possible.

“The Bank of England’s decision to raise interest rates in November and the probability of further hikes in 2018 may way well weigh down on car sales. We now expect two Bank of England rate hikes in 2018. On a modestly positive note for private car sales, the squeeze on consumers’ purchasing power should ease as 2018 progresses.”