UK car demand tumbles by 9.3% amid Brexit uncertainty

New car sales fell by 9.3 percent in July, the fourth consecutive month in which demand has decreased.

The Society of Motor Manufacturers & Traders (SMMT) has attributed Brexit and economic uncertainty as the main cause for the continuing slump in sales. In the second quarter of this year, there have been 161,997 cars sold in the UK – a contrast to the record-breaking growth of the year's first three months.

Demand fell across business, fleet and private buyers by -23.8 percent, -10.1 percent and -6.8 percent respectively. Conversely, dual-purpose and sports cars sales rose by 7.3 percent and 10.3 percent respectively, although volumes were comparatively tiny.

Sales of diesel cars fell to 69,157 in July, close to 17,000 less than sales were in the same month of 2016, suggesting that consumers are being affected by announcements for diesel taxes, despite the fact such policies won’t affect the latest Euro 6-standard models.

The same comparison for petrol shows a smaller drop of close to 3,000 units, with numbers down to 83,969 for July.

One area of the market that has seen continued growth is alternatively fuelled vehicles (AFVs), which soared in sales by 64.9%. AVFs also grew their market share, but still only accounted for 5.5% of overall sales, meaning the growth was far from offsetting the slump in petrol and diesel cars.

Nevertheless, 8,871 new AVFs were driven off forecourts in this quarter – a new record high.

Year-to-date sales figures stand at 1,563,808, compared with 1,599,159 at this point in 2016.

SMMT CEO Mike Hawes said: “The fall in consumer and business confidence is having a knock on effect on demand in the new car market and government must act quickly to provide concrete plans regarding Brexit.

“While it's encouraging to see record achievements for AFVs, consumers considering other fuel types will have undoubtedly been affected by the uncertainty surrounding the government's clean air plans. It's important to remember that there are no plans to charge drivers using the latest Euro 6 models and no proposed bans for conventional petrol and diesel vehicles for some 23 years.

“The lower demand in recent months will inevitably mean competition from manufacturers will intensify and it will be a good opportunity for consumers to get a great deal on their next car, with many exciting new models launched in the coming months.”