UK new car sales fall sharply in May
UK car registrations fell again last month, as the introduction of low emission zones undermined confidence and drivers continued to turn their back on diesel cars.
The Society of Motor Manufacturers and Traders said a total of 183,724 new vehicles were registered in May, a 4.6% decline year-on-year. Private new car registrations fell 5%, which was worse than the 3.2% average decline in the previous 12 months.
In the year-to-date, the market was down 3.1%, with 33,000 fewer cars registered compared to the same period in 2018.
The SMMT attributed the fall to ongoing uncertainty over diesel cars and the introduction of clean air zones, as well as the removal of incentives for plug-in hybrid vehicles.
"Modest growth in registrations of petrol - 1% - and alternatively fuelled vehicles - 11.7% - was not enough to offset the significant decline in demand for diesels, which fell for the 26th consecutive month," the trade body said. "Ongoing anti-diesel sentiment and the forthcoming introduction of low emission zones continues to affect buyer confidence."
Mike Hawes, chief executive of SMMT, said: "Confusing policy messages and changes to incentives continue to affect consumer and business confidence, causing drivers to keep hold of their older, more polluting vehicles for longer. New cars are safer, cleaner and more advanced than ever."
Battery electric cars recorded a surge in registrations, up 81.1%, although the segment represents just 1.1% of the market. Sales of petrol electric hybrids rose 34.6% to 7,785 units, but plug-in hybrids were down 40.6% in May and by 25.1% in the year to date.
The SMMT added that "underlying economic and political instability" was also dampening consumer confidence.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The continued weakness of car sales in May, after a dreadful April, partly reflects the decision by many consumers to complete purchases before the original March deadline for Brexit. In the event of a no-deal, a 10% tariff would have been levied on cars imported from the EU, and some car brands had pledged to pass on those higher costs to consumers immediately."
Pantheon Macroeconomics estimates that car sales are on course to be about 8.1% below 2018’s average in the second quarter.