The UK new car market was down 15.7% in March with diesel car sales down by a hefty 37.2%, continuing the trend of rapidly declining diesel share, according to SMMT data. Diesel share in March was down to 32.4% versus 43.5% in March of last year.
The SMMT noted that the comparison is with a record March last year, as buyers seized the chance to purchase cars before new Vehicle Excise Duty (VED) rates came into force in April last year. It said registrations are still running at a historically high level and last month's market was the fourth biggest March on record.
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The decline to sales in March was widely expected.
The SMMT said that economic and political uncertainty and confusion over air quality plans continued to affect confidence, resulting in declines across all sales types. Demand from business, fleet and private buyers all fell in March, down -14.3%, -15.0% and -16.5% respectively. Continuing the recent trend, diesel registrations declined in March, down -37.2%. Registrations of plug-in and hybrid vehicles continued to rise, albeit modestly, up 5.7%, with demand for plug-in hybrids driving growth, up 18.2% for the month. Registrations of petrol cars were essentially stable, up 0.5%. The decline in demand for diesel cars continues to be of concern and the latest tax changes announced by the government do nothing to encourage consumers to exchange their older diesel vehicles for new lower emission models.
Mike Hawes, SMMT Chief Executive, said: "March's decline is not unexpected given the huge surge in registrations in the same month last year. Despite this, the market itself is relatively high with the underlying factors in terms of consumer choice, finance availability and cost of ownership all highly competitive. Consumer and business confidence, however, has taken a knock in recent months and a thriving new car market is essential to the overall health of our economy.
"This means creating the right economic conditions for all types of consumers to have the confidence to buy new vehicles. All technologies, regardless of fuel type, have a role to play in helping improve air quality whilst meeting our climate change targets, so government must do more to encourage consumers to buy new vehicles rather than hang onto their older, more polluting vehicles."
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By GlobalDataCommenting on the latest SMMT car registration figures for the month of March, Justin Benson, Head of Automotive at KPMG UK, said: "March 2017 set a high base for comparison but the latest numbers are demonstrating significant reductions of car registrations.
"The new Vehicle Excise Duty (VED) rates are clearly having an effect, but the decline in diesel cars is not being transferred to Alternative Fuel Vehicles (AFV's) or petrol. This suggests that people are keeping their vehicles for longer.
"For manufacturers there is opportunity in the numbers. Exports remain at historically high levels and all forms of propulsion, including diesel, are required. Around 80% of vehicles made in the UK are exported, and with strong overseas economies such as the USA and China, our automotive manufacturers and suppliers can take full advantage of their great brands and the value of the pound to continue to grow robust sales overseas.
"Much like businesses, consumers are currently in the 'wait and see' camp wanting certainty around the economic environment. Brexit, concerns over inflation above earnings growth, and of course the Bank of England's hints that they will raise interest rates in the near future are all causing consumers to hold back. However, those who are in the market for a new car should drive a hard bargain."
Top Ten models, Q1 2018
1. Ford Fiesta, 32,808 units
2. VW Golf, 21,203 units
3. Nissan Qashqai, 16,914 units
4. Ford Focus, 15,560 units
5. Vauxhall Corsa, 15,352 units
6. Ford Kuga, 13,096 units
7. Mercedes A-Class, 12,213 units
8. MINI, 11,724 units
9. Vauxhall Mokka X, 10,885 units
10. Mercedes C-Class, 10,832 units
Source – SMMT
