UK new car market suffers biggest decline in Europe

The UK experienced the fastest rate of decline in the European new car market in the first quarter of 2018.

Figures provided by industry analysis company JATO show that Britain’s new car sales totalled 718,489, equating to a 12.4% fall on the first quarter of last year. The UK ranked bottom, below Norway and Ireland, which saw year-on-year sales decreases of 11.3% and 5.3% respectively.

The UK drop heavily contrasts with the 0.7% increase in demand experienced by the wider European region. Growth was driven by rapid increases in demand for cars within countries such as Spain, Hungary and the Netherlands, which saw sales surge by a respective 11.9%, 29.9% and 13.9%.

European demand was actually down in the month of March by 5.2%, but January and February demand proved so strong that it ensured an overall gain in the quarter compared with the first three months of 2017.

The UK has been in decline for several months, with March seeing a 15.7% fall in sales. The downward trend is expected to continue in April.

Much of the fall has been associated with diesel’s damaged image and the UK Government’s recent diesel tax hike. It is thought to have discouraged people from buying new diesel models, which, up until recently, consistently represented more than 40% of the new car market but now account for 33.5%.

This diesel decline has been felt across the whole of Europe, too, with diesel cars now accounting for 38% of overall sales in the first three months of 2018, down from 46% in the same period last year.

Land Rover was hit hardest by diesel’s woes, with sales for the Coventry car maker down by 21% in the first quarter. The company recently confirmed it wouldn’t be renewing 1000 agency staff contracts amid falling demand.

Another British brand, Vauxhall (and its continental equivalent, Opel) was the next worst off, with sales down by 16%. Both of those brands have also confirmed that they will be reducing the number of franchised dealers in order to boost efficiency of the sales network.

Volkswagen remained Europe’s top brand and achieved 2% growth in the first three months of the year. Sales of the Golf hatchback reached 54,060, keeping it ahead of the Ford Fiesta – which suffered from a 15% decline in demand – to take the top spot in Europe by 14,164 units.

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