UK new car sales stayed in reverse gear during January, falling 6.3% on the same period in 2017 due to political uncertainty and fears over higher taxes on diesels.
It was the 10th successive month of falling car sales, although January’s decline was less severe than the previous three months, at -12.2% in October, -11.2% in November and -14.4% in December.
Private car sales fell even more steeply than the company fleet sector in January, down 9.5% year on year, while fleet sales were down 1.8%.
Howard Archer, chief economic advisor to the EY ITEM Club, warned the figures showed a “serious loss of momentum in the sector”.
“The fact that car sales have fallen year on year every month since April 2017 points to a clear weakening underlying performance,” he said.
“It is notable that private sales saw a deeper drop than the overall decline in car sales in 2017, with a fall of 6.8%.
“The share of private sales of total new car sales fell to 44.2% in 2017 from 44.8% in 2016. This is consistent with the overall softness in consumer spending over the year.”
Archer said that even allowing for uncertainty over government policy on diesel cars affecting fleet sales, businesses had become reluctant to replace or add to their fleets given the uncertain economic and political outlook.
“Reinforcing the weakened picture, new car sales to the business sector plunged 29.7% year on year in January, although this sector is now tiny with sales at just 4,686 in January. Business car sales fell 7.8% over 2017,” he added.