Car sales post first decline in five years as policy changes make Britons wary of diesel-powered vehicles
According to data collated by the Society of Motor Manufacturers and Traders (SMMT), 2017 marked the first decline in UK car sales in five years, with the trade association putting the blame on Westminster for creating uncertainty over the future of diesel-powered vehicles in Britain.
However, despite total new vehicle sales falling 5.6% from their 2016 mark to reach 2.54m and diesel sales backtracking 17.1%, 2017 sales still came in at the third highest level over the last decade.
Sales reached a record high back in March, but by December were showing a decline of 13.9% year-on-year as 152,000 fewer cars were sold as opposed to the same month a year earlier.
The SMMT predicted a further decline in sales of between 5% and 7% for 2018.
Mike Hawes, SMMT chief executive, said, "2017 has undoubtedly been a very volatile year and the lacklustre economic growth means that we expect a further weakening in the market for 2018. The upside for consumers, however, is some very, very competitive deals."
Hawes said sentiment had softened as the government's "confusing anti-diesel messages" had led to hesitation amongst consumers looking to purchase new low-emission diesel vehicles.
Sales of diesel vehicles dropped 31% in December, while petrol car sales fell 1.6%.
Hawes said, "There has been this underlying confusion among consumers over whether buying diesel was the right thing to do."
Alternative fuel vehicles increased their market share to a total of 4.7%, as sales jumped 35% to roughly 119,000, although only about 13,600 were fully electric rather than hybrid.
The SMMT expects diesel to hold on to a market share of more than 40% of new car registrations in 2018.
Howard Archer, chief economic advisor to the EY ITEM Club, said, "Even allowing for uncertainty over government policy on diesel cars affecting fleet sales, it appears that that businesses have become more reluctant to replace or add to their fleets amid a highly uncertain economic and political outlook. Fleet sales fell 4.5% over 2017."
"Reinforcing the weakened picture, new car sales to the business sector plunged 35.3% year-on-year in December, although this sector is now very small with sales at just 5,339 in December. Business car sales fell 7.8% over 2017 to be just 97,564 units."
Simon Benson, head of motoring services at AA Cars, added, "Transactions were down almost 6% over 2017 as a whole, revealing just how much a lack of consumer confidence cost the economy over the last year."
"The market can give a small sigh of relief as these figures do show a significant uplift in interest in electric vehicles. Registrations of alternatively fuelled vehicles rose by more than a third in December to hit a record high," he concluded.