UK car industry hits the brakes as new registrations fall 9.3% in September

UK car sales recorded the first drop in September in six years.Reuters

Sales of new cars in Britain fell for the sixth consecutive month in September, dragged lower by a sharp decline in demand for diesel cars, figures released on Thursday showed (5 October).

According to data published by the Society of Motor Manufacturers and Traders (SMMT), the number of new car registrations fell 9.3% year-on-year to 426,170 last month. The figure was the first decline in the month of September on record for six years and raises the risk car registrations in Britain could post their first annual decline since 2011.

"September is always a barometer of the health of the UK new car market so this decline will cause considerable concern," said SMMT chief executive Mike Hawes.

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"Business and political uncertainty are reducing buyer confidence, with consumers and businesses more likely to delay big ticket purchases."

The drop in the headline figure was exacerbated by a sharp fall in the number of diesel cars sold, which plunged 21.7% from the corresponding period last year, in the wake of mounting worries about air quality.

A number of other car manufacturers, including Ford, Vauxhall, BMW and Mercedes, have launched trade-in scrappage schemes for cars and vans in a bid to get some of the older vehicles off the road.

However, Hawes warned the schemes alone would not be enough to boost a flagging market.

"The confusion surrounding air quality plans has not helped, but consumers should be reassured that all the new diesel and petrol models on the market will not face any bans or additional charges," he added.

"Manufacturers' scrappage schemes are proving popular and such schemes are to be encouraged, given fleet renewal is the best way to address environmental issues in our towns and cities."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, added: "The recent fall in consumer confidence and the prospect of a further pickup in inflation and borrowing costs before the end of this year will likely mean that car sales revert to dragging on consumption growth in the fourth quarter."

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