Once again, car sales slowed in January. On the face of it, this clearly this isn’t great news for the UK car industry – but what are the underlying factors that are going into this ongoing trend? It’s the tenth month in a row that sales have been down – but here at Big Motoring World we’d suggest that there might be more to the figures than meets the eye.
Diesel, diesel, diesel
The big story here is the diesel factor. The UK government hasn’t been alone in waging a war against vehicles that are considered to be more polluting – Britain is aiming to ban sales of diesels by 2040, Copenhagen is banning all new diesels by next year, and the Chinese government have also announced that they are planning to halt the production of all petrol and diesel cars ‘in the near future’. There’s most definitely a movement that is building momentum then – and it’s having a big impact on sales – particularly of diesels. There’s been a huge drop since last January – around 25 per cent – and that’s made up a considerable part of an overall drop in sales this month. The big picture for the UK’s new car market shows a fall of 6.3% in January – 163,615 new sold in the first month of the year.
The bigger picture
Looking more broadly, it’s important to see these falls in the context of the record growth that new car sales saw up until last April – many dealers are suggesting that the recent fall in diesel sales is simply a ‘correction’. Maybe so – but the fact remains that many UK car manufacturers still have a substantial amount of money tied up in diesel technology – investments that were made before the calls for changes to regulations in the light of air pollution concerns and the controversy around emissions testing.
The industry – and consumers too – now face a very different reality, with a recent one-off tax increase for new diesel buyers and an increase in company car tax for diesels. These changes have clearly already had an impact on overall sales – but we’ll be watching closely to see what the longer term impact on the industry is too.