Slump in diesel demand drives decline in new car sales

New car sales remained stuck in reverse gear last month, with Scottish dealerships suffering more pain than their counterparts south of the Border.

Demand for diesel cars plummeted 21.3% year-on-year in August. Picture: Contributed
Demand for diesel cars plummeted 21.3% year-on-year in August. Picture: Contributed

Industry figures revealed that just over 76,400 cars were registered across the UK in August, down 6.4 per cent on the same month last year. In Scotland, the total fell by 10 per cent to 5,827 vehicles.

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August is traditionally one of the quietest months for showrooms ahead of the September plate change and industry leaders pointed to a likely lift in the months ahead from various scrappage and trade-in incentive schemes introduced recently by car manufacturers such as Vauxhall and Volkswagen.

Some 1.64 million new cars have been sold so far this year UK-wide, a decrease of 2.4 per cent on the same period in 2016.

Sandy Burgess, chief executive of the Scottish Motor Trade Association, said: “Whilst disappointing to see the continuing decline of these results, this is no surprise to us as we have been suggesting that the market will self-adjust throughout the remainder of this year.

“That said, the significant increases in manufacturer support now being experienced will have a very positive effect on the private buyers and may well bring some increase in activity levels within that sector of the market.

“With Scotland having an even split across private and business purchases this in turn could reduce significantly the overall impact of the softening of the market experienced to date.”

Mike Hawes, head of the Society of Motor Manufacturers and Traders (SMMT), which complies the figures, added: “August is typically a quiet month for the new car market as consumers and businesses delay purchases until the arrival of the new number plate in September.

“With the new 67-plate now available and a range of new models in showrooms, we anticipate the continuation of what are historically high levels of demand.”

The decline in the UK new car market for a fifth consecutive month is also likely to have been impacted by higher vehicle excise duties, particularly at the upper end of the market.

Demand for diesel cars continued to plummet, down 21.3 per cent year-on-year in August and 11.5 per cent for the first eight months of the year.

Petrol models were up 3.8 per cent last month, while alternatively fuelled vehicles rose 58.3 per cent to achieve a market share of 5.2 per cent.

On Friday, Volkswagen became the latest manufacturer to launch a scrappage scheme offering motorists thousands of pounds if they trade in an old diesel car for a new model.

Alex Buttle, director at car buying comparison website Motorway.co.uk, said: “Diesel continues to have a woeful 2017. Comparing last month to August 2016, the picture is a pretty bleak one, with new car registrations down more than fifth. And the bad news keeps coming.

“Nearly every major car brand has announced their own diesel car scrappage schemes over the past few months. It’s unlikely to instil too much confidence in consumers to buy diesel when they see how little faith the manufacturers themselves have in diesel motors.”

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