New car sales stall in June, ending spurt of increases

Sales of new cars fell in June ending a brief burst of increases in the preceding two months that the industry had hoped would draw a line under its torrid period.

Sales fell 3.5% to 234,945 in June fuelled by a slump in purchases of diesel vehicles amid uncertainty about their future, the Society of Motor Manufacturers and Traders said.

Petrol cars registered a 12.3% increase in sales to 145,035 but diesel sales plunged 28.2% to 74,361.

New car sales fell in 2017 in the first annual decline for five years and kept dropping in early 2018. Sales were hit by economic uncertainty and doubts about the future of diesel cars as the government cracks down on vehicle emissions.

New sales picked up in April and May, suggesting the industry’s hard times could be coming to an end. SMMT put a brave face on the renewed fall, describing it as modest and saying the market was stabilising. In the year to date, demand is down 6.3%, SMMT said.

Howard Archer, chief economic adviser to the EY Item Club, said the pick-up in sales in April and May was probably partly caused by a surge in new registration plate sales delayed by bad weather in March

Archer said: “New car sales disappointingly relapsed in June This reinforces the suspicion that the year-on-year gains in May/April were significantly lifted by special factors. Consumers are currently still under significant pressure and it looks unrealistic to expect a marked upturn in consumer spending any time soon.”

Plug-in and hybrid registrations increased 45% to 15,549 in June – less than 7% of the overall market.