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New plate fails to halt slumping car sales

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The UK new car sales market slid almost 16% in March – despite the launch of a new registration plate that traditionally draws buyers into showrooms.

Latest figures from the Society of Motor Manufacturers & Traders (SMMT) show that 474,069 cars were registered in the month, 15.7% down on March 2017 and completing a full year of falling sales.

First-quarter sales in 2018 have slid more than 12% compared to 2017, but the SMMT has tried to put a gloss on the figures, arguing that the March figure is still the fourth highest on record and that so far this year more than 700,000 motorists have driven home in a new car.

New car registrations, March 2018
Diesel has now fallen below a third of total new car registrations

March 17 ‘a blip’

As we predicted last month, the March results were inevitably going to look poor in comparison with last year. Increases to vehicle excise duty (road tax) last April led to a significant blip in registrations in March 2017, producing the highest-ever month for sales as motorists rushed to buy new models and beat the price rises.

“March’s decline is not unexpected given the huge surge in registrations in the same month last year,” says SMMT chief executive Mike Hawes, adding; “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,” Hawes argues.

“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.”

Car Sales The Car Expert
Wintry weather in March added to the challenges facing dealers trying to meet sales targets.

More diesel disaster

Hawes’s comments come in the wake of further disastrous sales figures for diesel-powered cars – registrations slid another 37% in March with 153,594 leaving showrooms. Diesel’s slice of the UK market is now at 32%, whereas at the end of 2015 it was virtually equal to petrol at 50%.

Despite the protestations of various UK industry figures, it’s important to remember that the same thing is happening worldwide, with customers moving away from diesel in all the major European markets. German results reported today showed a 25% decline in diesel sales against an overall 3% decline.

Sales of ‘alternatively-fueled’ vehicles – encompassing hybrids and electric vehicles and often pointed to by the SMMT as a positive aspect of the market, continue to rise, but the rate has slowed significantly. Registrations in March were up 5.7% with 24,126 vehicles registered, claiming 5% of the market – a market share that has not really grown in the last year despite a continued increase in the number of new hybrid and electric models available to buy.

Fiesta still rules, Corsa improves

The Ford Fiesta retains its rock-solid place at the head of the best-sellers top 10, with 19,272 vehicles registered in March. The Volkswagen Golf holds second on 13,966 and the Nissan Qashqai third on 12,018.

It was also a stronger month for the Vauxhall Corsa, vaulting back up to fourth place after a slow start to the year.

Top ten new cars, March 2018
Business as usual for the Ford Fiesta

The latest from The Car Expert

Andrew Charman
Andrew Charman
Andrew is a road test editor for The Car Expert. He is a member of the Guild of Motoring Writers, and has been testing and writing about new cars for more than 20 years. Today he is well known to senior personnel at the major car manufacturers and attends many new model launches each year.