Car sales stuck in slow lane as eco motors rev ahead

The new car market has declined for a third consecutive month, but shows signs of stabilising amid a jump in sales of electric and hybrid vehicles.

Ford's Fiesta topped the sales chart north of the Border last month. Picture: Contributed

Industry figures revealed a 4.8 per cent year-on-year decline in registrations last month, following much sharper falls in April and May. North of the Border, there was a 5.7 per cent fall in June.

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Many buyers brought orders forward to March ahead of new vehicle excise duty (VED) rates coming into force, including the introduction of a “luxury” levy that sees anyone purchasing a diesel or petrol vehicle above £40,000 being stung to the tune of £450 a year, for five years, on top of the regular VED rate.

Demand for new diesel cars dropped by 14.7 per cent last month, while petrol rose 2.5 per cent and alternatively fuelled vehicles (AFVs) leapt 29 per cent. AFVs took a market share of 4.4 per cent in June, compared with 3.2 per cent during the same month in 2016.

The figures from trade body the Society of Motor Manufacturers & Traders (SMMT) were released as Volvo become the first traditional car maker to announce that all of its new models will have an electric motor.

From 2019, the Swedish firm will only launch cars that are either pure electric or hybrids combining electric and conventional engines.

Volvo Cars president Hakan Samuelsson said the step “marks the end of the solely combustion engine-powered car” and he hopes there will be strong demand for the vehicles in the UK.

The latest data showed that some 1.4 million cars have been sold so far this year, down 1.3 per cent on the same period in 2016. It said the market was performing “in line with 2017 forecasts” following a record opening three months of the year.

SMMT chief executive Mike Hawes said: “Provided consumer and business confidence holds, we expect demand to remain at a similarly high level over the coming months.

“It’s encouraging to see alternatively fuelled vehicles experiencing rapid growth but adoption is still at a relatively low level and more long-term incentives are required if this new generation of vehicles is to be a more common sight on British roads.”

Charles Johnston, the boss of Edinburgh-based Dukosi, which is developing a new approach to battery cell monitoring systems that optimises how lithium-ion batteries are used in electric vehicles, said: “We are seeing a heightened interest in our technology which seems to align with what appears to be a fundamental shift in focus within the auto industry to accelerate the move to electrification.”

Scotland’s best-selling cars in June

1. Ford Fiesta (814)

2. Vauxhall Astra (660)

3. Mini (542)

4. Volkswagen Golf (505)

5. Renault Clio (499)