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Car sales in the UK just fell by 12%…. so, what now?

Car sales

The current state of the UK motor industry is… well, uncertain as car sales fell for the seventh month in a row. Sales dropped by more than 12% in October which has left both consumers and businesses unsure of what’s going to happen in the near future. These figures show that our industry is set for its first annual decline since 2011. Trading body the Society of Motor Manufacturers and Traders (SMMT) think that sales will continue to fall throughout next year before stabilising in 2019.

Car registrations falling

The SMMT revealed that car registrations fell by 12.2% year-on-year and only 158,192 vehicles were registered last month. (This is the second double-digit decline this year!) It’s a fairly big dip from the car sales in September which fell by 9.3% – it was the first time the market declined in September in six years. And in April, car sales fell by a hefty 19.8% due to increases in vehicle excise duty.

In the last month, the sale of diesel fell by nearly 30% which may have been due to the controversy over rigged emissions tests and the newly announced restrictions on diesel vehicles. The demand for hybrid and electric cars is an ever growing business as sales were up by 37%. Elsewhere, petrol vehicles had a small boost during October with an increase of 2.7%.

Is Brexit to blame?

Something that’s thought to be having a significant impact on car sales is the worrying uncertainty that surrounds Brexit. The motor industry generates £72 billion a year and it’s in our best interest for the government to secure a tariff-free deal with the European Union (EU). If the motor industry is to have a smooth transition as we leave the EU we need to have a strong working relationship with our biggest market and open borders so products, parts, and investment can flow with ease.

October wasn’t the ideal month all round for the motor industry as figures from the SMMT have shown that the demand from businesses and fleet orders dropped by 26.8% and 13% respectively last month. Overall the car market is down by 4.6% this year so far when compared to 2016 sales. Even van sales were down and declined by 7.4%. This is a clear indication that there is little business confidence at the moment.

Driving test changes

Something that could also be impacting car sales is the new changes that will be made to the practical driving test from 4th December 2017. The changes have been met with some controversy and might be putting potential consumers off learning to drive. The test is being modernised and includes four key changes including driving with technology. Although, one in five tests will not require the use of a sat nav.

2017 has been quite the year for the motor industry and the next couple of years as we transition to leave the EU will be filled with challenges. As Brexit takes place and negotiations get underway we’ll have a clearer picture of what will happen next for the world of motoring.

 

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