UK car registrations fall for fourth consecutive month

Data released on Thursday showed that total new car sales have declined for the fourth month in a row in June, while alternatively fuelled vehicle demand dropped for the first time in 26 months.

New car registrations decreased year-on-year by 4.9% to 223,421 units, according to the latest figures released today by the Society of Motor Manufacturers and Traders (SMMT), with ongoing confusion over low emission zones and diesel, the removal of key ultra low emission vehicle incentives and an overall decline in buyer confidence cited as the causes of ongoing market decline.

In the year to date, new registrations are down 3.4%, with 1,269,245 new cars having driven out onto British roads.

Declines were seen across every vehicle segment except dual purpose, which grew 9.1% in June and 7.3% year-to-date to take 22.6% of the market, though Supermini remained the UK’s best-selling segment as it made up 31% of all registrations in the first six months.

Also in year-to-date terms, 20.5% and 50.4% respective drops in registrations of diesel and plug-in hybrids offset growth in battery electric registrations to send the alternatively fuelled vehicle sector into negative growth for the first time since April 2017, in what SMMT chief executive Mike Hawes called a cause for "grave concern".

Mike Hawes, SMMT chief executive, said: "Manufacturers have invested billions to bring these vehicles to market but their efforts are now being undermined by confusing policies and the premature removal of purchase incentives. If we are to see widespread uptake of these vehicles, which are an essential part of a smooth transition to zero emission transport, we need world-class, long-term incentives and substantial investment in infrastructure."

However, Pantheon Macroeconomics's Samuel Tombs was more upbeat, pointing to "briskly" rising real wages and above average consumer confidence and arguing that UK car sales should recover in the third quarter.

"In addition, the relative stability of sterling against the euro over the last two years suggests that car price inflation should ease from May’s 3.6% rate," he said.

"The cost of car finance also should begin to fall, given the recent decline in banks’ funding costs and corporate bond spreads."