Economy

Brexit Chills UK Car Sales in First September Drop Since 2011

Brexit Chills UK Car Sales in First September Drop Since 2011”

Sales were hurt by business and political uncertainty as Britain prepares to leave the European Union and confusion over government plans on diesel and petrol cars, which could include new levies or restrictions, the Society of Motor Manufacturers and Traders (SMMT) said.

Some 2.07 million new cars have been registered so far this year, a decrease of 3.9% on the same period in 2016.

Meanwhile, demand from private buyers fell 8.8 per cent on previous year, while demand from business buyers declined 5.2 per cent and fleet buyers fell 10.1 per cent.

Electric auto sales continued their good momentum, with alternatively fuelled vehicle sales accelerating 41.0% in the month and 34.6% year-to-date, with almost 95,000 leaving forecourts this year.

The figure was down 9.3% from September past year, while diesel sales - which have been hit by worries over air quality - fell by 21.7%.

Mike Hawes, the SMMT chief executive, said: "September is always a barometer of the health of the United Kingdom new auto market so this decline will cause considerable concern". Business and political uncertainty is decreasing buyer confidence, with customers and organizations more likely to delay big ticket purchases.

The SMMT said economic and political uncertainty, as well as confusion over air quality plans, had led to a fall in consumer confidence. Manufacturers' scrappage plans are becoming popular and such schemes are to be encouraged given fleet renewal is the ideal way to deal with environmental issues in our towns and cities, Hawes added. Sales of diesel cars crashed by 21.7% in September.

"In seasonally-adjusted terms, however, we estimate that registrations were 9.7% higher in [the third quarter] than [the second quarter], when sales were hit by April's increase in vehicle excise duty".

Sales of alternatively fuelled cars carry on growing despite the drop in the overall market, but they were still at very low levels - just 22,628 sold, a market share of 5.3 per cent.

Howard Archer, chief economist at consultancy EY ITEM Club, said the decline in fleet demand, which accounts for around half of all vehicle demand, was of particular concern.

"The Bank of England has shown mounting concern over this and is keen for a more responsible approach to be adapted".

After two successive quarters of decline in auto sales, noted Alex Buttle of vehicle buying comparison website Motorway, the UK's new vehicle market is officially in recession.

Among the measures local authorities are being asked to consider is the introduction of clean air zones, which would ultimately restrict the movement of more polluting vehicles in areas impacted by poor air quality, and could see drivers paying to use some roads. "It feels like this combination of negative forces will keep kicking the market hard when it's already on the floor".



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