Dwindling consumer confidence dents UK car market

The UK new car market saw a further decline in October – falling more than 12% compared with the same month last year.

Fears over emissions regulations turned buyers away from diesel-powered vehicles, with the sector declining by almost one third.

The decline was the seventh consecutive month of reduced demand as new registrations reached 158,192, down 12.2% on the 180,168 vehicles registered in October last year.

Data from the Society of Motor Manufacturers and Traders (SMMT) shows there were declines across all sectors, with business and fleet demand down 26.8% and 13.0% respectively. Meanwhile, dealers reported 10.1% fewer private buyers taking delivery of new cars in the month.

Alternatively Fuelled Vehicle (AFV) demand continued to rise, up 36.9% to 8,244 registrations, while petrol models enjoyed a more modest growth of 2.7%.

However, these gains were unable to offset heavy losses in the diesel segment, as continuing consumer concerns resulted in its biggest hit yet, with demand down 30%.

Year-to-date, the overall market is down 4.6% on 2016 levels, with 2,224,603 cars registered in the first 10 months. This aligns with the SMMT’s latest forecast for 2017, with the market expected to end the year on 2.565 million units – a 4.7% drop on 2016.

Mike Hawes, SMMT chief executive, said: “Declining business and consumer confidence is undoubtedly affecting demand in the new car market but this is being compounded by confusion over government policy on diesel.

“Consumers need urgent reassurance that the latest, low emission diesel cars on sale will not face any bans, charges or other restrictions, anywhere in the UK. We urge the Government to use the forthcoming Autumn Budget to restore stability to the market, encouraging the purchase of the latest low emission vehicles as fleet renewal is the fastest and most effective way of addressing air quality concerns.”

Among the leading manufacturers, Jaguar saw a fall of more than 38% in new registrations (1,827 against 2,981 in October 2016), while Land Rover saw a 6.6% dip (5,270 against 5,645).

Rivals BMW (18.4%) and Audi (6.5%) were also down, although Mercedes-Benz fared better with a 7% increase – one of the few manufacturers to do so.

BMW-owned MINI was down 34.4%, while Vauxhall continued its slump (down almost 35%).

There was better news for Toyota (up more than 13%) but the honours again went to Aston Martin, which showed a 71% increase in new registrations compared with October 2016 (87 cars against 51).