Demand across the board dropped in April, including for alternatively fuelled vehicles with hybrids hit by tax changes

New car sales in the UK plummeted 20% in April, largely due to the rise in Vehicle Excise Duty (VED) rates, according to industry body the Society of Motor Manufacturers & Traders (SMMT).

Registrations fell by 19.8% to 152,076 in April, compared with 189,505 cars sold in April 2016.

It was also the first month in 47 in which there was a downturn in demand for alternatively-fuelled vehicles (AFVs) which is also attributed to the higher VED rates affecting hybrid models. 

Private buyers and business demand were also down, falling by 28.4% and 21% respectively. Meanwhile, petrol demand dropped by 13.1%, but the most notable drop was diesel which fell by 27.3%. However, despite sales falling, the market share for diesel rose versus April. In March, diesel accounted for 43.4% of sales and in April, 44.9%.

Overall, the market is up 1.1% year-to-date with a record 972,092 cars registered in the first four months.

The news comes after a bumper March for car sales, thanks to the number plate change and the public’s desire to avoid the VED rises that came into force on 1 April.

SMMT chief executive Mike Hawes said: “With the rush to register new cars and avoid VED tax rises before the end of March, as well as fewer selling days due to the later Easter, April was always going to be much slower.

"It’s important to note that the market remains at record levels as customers still see many benefits in purchasing a new car. We, therefore, expect demand to stabilise over the year as the turbulence created by these tax changes decreases.”

Talking about the tax rises, Hawes told Autocar: "We never like regulatory changes, but they do come from time to time. They always disrupt the market and present business with some challenges."

Regarding the diesel dip, Hawes said: "Market share [of diesel] is generally declining. There is a shift to AFVs, driven by fuel economy. Diesel offers good fuel economy but electric vehicles are even better." He added that another factor was "uncertainty around the clean air zones" in the UK, with more details to be announced tomorrow

He anticipates that May will be "a bit stronger" for sales, but the SMMT's forecast for the year - a 5% drop in car registrations - remains.

The Ford Fiesta continues to be the best-selling model in the UK with 4957 cars sold. The Nissan Qashqai and Mercedes-Benz C-Class came second and third, selling 4430 and 3777 models respectively.

The market for premium hatchbacks was particularly strong, with the Audi A3, BMW 1 Series and Mercedes-Benz A-Class among the best-sellers of the month. The A-Class even outsold the Ford Focus, Vauxhall Astra and Volkswagen Golf, selling 3608 units in April.

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Comments
18

4 May 2017
I shouldn't think any manufacturers are going to be worrying too much about this, likely just a blip after the extra sales before April. I suspect sales will soon stabilise again.

Citroëniste.

4 May 2017
Bob Cholmondeley wrote:

I shouldn't think any manufacturers are going to be worrying too much about this, likely just a blip after the extra sales before April. I suspect sales will soon stabilise again.

Possibly but I reckon low co2 polluters like hybrids sales figures won't rise as people will buy more mainstream models with ved being the same irrespective.

5 May 2017
Have no fear the FCA will ruin the new car market soon. Watch this space

4 May 2017
That means older, more polluting vehicles will probably be on the roads a bit longer than they would have been. It also means less work for manufacturers, so less work for parts suppliers, so less income tax flowing in. And it also means less VAT being paid to dealers when the cars are purchased, so even less tax going back to the treasury. Well done George Osborne, glad you gave up your day job. Don't hurry back.

4 May 2017
it will no doubt be blamed on Brexit along with the lower property sales resulting from horrendous stamp duty increases.I will not buy Blackrock investments when they can waste £about £15k a day on employing Osborne for his fantastic bullshit skills.

4 May 2017
In 4 Months time all will be back to normal, until the next VED change.

 

Hydrogen cars just went POP

8 May 2017
Cobnapint wrote:

That means older, more polluting vehicles will probably be on the roads a bit longer than they would have been. It also means less work for manufacturers, so less work for parts suppliers, so less income tax flowing in. And it also means less VAT being paid to dealers when the cars are purchased, so even less tax going back to the treasury. Well done George Osborne, glad you gave up your day job. Don't hurry back.

that's utter rubbish. Keeping old cars running for longer is the only option for protecting resources and the environment. Longevity is everything in environmental terms.

I don't need to put my name here, it's on the left

 

4 May 2017
Not sure if this is coincidence however seen a few older multi cylinder upmarket petrol cars parked in "my" road recently as if people are saying I may as well enjoy a decent multi cylinder petrol engine rather than paying through the nose for a "new terrible diesel"

4 May 2017
The figures of the two side by side new car sales do not tally. The new VED seems illogical but at least it appears simpler and less tiered. It would have been interesting to see the petrol vs diesel sales figures. Diesel salew figures have plumetted to around 40% of the market. Compare that to around 60% before the Volkswagen dirty diesel fraud was exposed.

4 May 2017
fadyady wrote:

The figures of the two side by side new car sales do not tally. The new VED seems illogical but at least it appears simpler and less tiered. It would have been interesting to see the petrol vs diesel sales figures. Diesel salew figures have plumetted to around 40% of the market. Compare that to around 60% before the Volkswagen dirty diesel fraud was exposed.

Nope Diesel sales never got to 60/40.
2016 - Diesel 100,000 Petrol 90,000
2015 - Diesel 94,500 Petrol 86,000
2014 - Diesel 90,000 Petrol 82,000

Best split for Diesel was around 53/47 I think it's now 49/51 and falling,.

 

Hydrogen cars just went POP

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