UK car market slows again due to Brexit and uncertainty on diesel regulations

Would-be buyers are unclear about what rules and regulations might be brought in around diesel cars

Caitlin Morrison@citycait
Monday 05 November 2018 16:06
Jaguar Land Rover CEO on car manufacturing in the UK after Brexit

The UK car market dropped again in October, with sales so far this year more than 7 per cent behind where they were at this point in 2017, with experts blaming emissions regulation and Brexit for the decline.

The number of new cars registered in October fell by 2.9 per cent compared with the same period of last year, the latest figures from the Society of Motor Manufacturers and Traders (SMMT) said.

Almost 153,600 new cars were registered last month, down from 158,200 during October 2017, and in the year-to-date, registrations have dropped 7.2 per cent compared with the first 10 months of last year.

The SMMT said the slowdown was due largely to the impact of diesel car emissions on air quality and uncertainty about what taxes and restrictions will be introduced on them, as well as tougher emissions regulations in the EU.

Demand for alternatively fuelled vehicles such as hybrids and pure electrics increased by 30.7 per cent to take a market share of 6.9 per cent.

James Fairclough, chief executive of AA cars, said this was welcome news, but added that the government “needs to make sure it doesn’t pull the plug out from under this burgeoning sector by removing incentives before they have a chance to properly bed-in”.

"What’s really needed to encourage growth in the electric vehicle sector is a rapid increase in the number of public chargers as the AA’s own research suggests this is one of the greatest barriers to electric vehicle ownership," he said.

SMMT chief executive Mike Hawes said: "Vehicle Excise Duty upheaval, regulatory changes and confusion over diesel have all made their mark on the market this year so it's good to see plug-in registrations buck the trend.

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"Demand is still far from the levels needed to offset losses elsewhere, however, and is making government's decision to remove purchase incentives even more baffling.

"We've always said that world-class ambitions require world-class incentives and, even before the cuts to the grant, those ambitions were challenging. We need policies that encourage rather than confuse."

Andrew Hooks, chief operating officer of carwow, said: “Brexit is paralysing the motoring industry. There cannot be a proper recovery until we know what the country’s future looks like.

“People are reluctant to buy and manufacturers are stuck between a rock and a hard place as they look ahead to life after Brexit - there is no denying this is taking a toll month after month.

“The industry is doing all it can, with offers from all major manufacturers tempting new car buyers and softening the blow, but we simply cannot do this alone. All we are doing is papering over the cracks.”

Additional reporting by newswires

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