New car registrations dropped by 3.4 per cent last month as political and economic uncertainty continues to hit demand.
Demand slipped in both private and business sectors as sales hit their lowest March level since 2013, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).
New car demand in March is considered a bellwether for the automotive industry, as the number plate change traditionally drives buyers into showrooms.
But the SMMT said Brexit uncertainty and continued confusion over diesel policies have taken their toll on the market.
“March is a key barometer for the new car market, so this fall is of clear concern,” said SMMT chief executive Mike Hawes.
“While manufacturers continue to invest in exciting models and cutting-edge tech, for the UK to reap the full benefits of these advances, we need a strong market that encourages the adoption of new technology.”
Diesel registrations fell 21.4 per cent last month while demand for petrol grew 5.1 per cent, in line with the trend of recent months.
Howard Archer, chief economic advisor at EY Item Club, said the car sector “may actually be slightly relieved” by the figures, due to the recent weakness in sales.
“However, the underlying picture may well be weaker than the headline March figure suggests, as there have been some indications that March’s sales were lifted by stronger-than-usual and appreciable pre-registering of vehicles during the month,” he added.
The SMMT has published a report revealing UK consumers could be among the first in the world to reap the rewards of self-driving cars. But it warned this progress is dependent on government support, as well as the guarantee of a deal for leaving the EU.
James Fairclough, chief executive of AA Cars, said: “March typically sees buyers rushing to dealerships to snag themselves cars with the latest plates, so these subdued figures are somewhat surprising.
“The stark truth is that the uncertainty in Westminster continues to set the tone for consumer confidence across the country - and with little clarity on what's happening over the next couple of weeks, buyers are being decidedly cautious in paying for big ticket items.”