Tuesday 8 January 2019 8:22 am

DEBATE: Should we celebrate the fact that car sales are down for the second year running?

Should we celebrate the fact that car sales are down for the second year running?

Benedict Spence, a freelance writer, says YES.

For all the talk of a fall in car sales in the UK, well over two million new vehicles were registered in Britain last year.

It’s a staggering number, and it was only a matter of time before the market began to contract. But that’s no bad thing.

Economic contractions in any industry are painful, but force evolution. Automotive manufacturers must evolve too to survive and prosper. They aren’t immune to market forces.

Government policy is partly to blame for reduced sales, and that’s not great. Demand for diesel cars has dropped due to a series of scandals, while the cost of running petrol vehicles is high. This is bad news for individuals, particularly for families and anyone who needs a car to get to work.

But now that price pressure means that demand is dropping, the industry will have to respond in a way that makes owning a car palatable for the public again.

Sure, it’s a pinch in the short term. But if it leads to more affordable, desirable cars, it’s a positive trend for the future.

Finn McRedmond, staff writer at Reaction, says NO.

The ongoing decline in car sales over the past two years reflects consumer anxieties about how a post-Brexit economy may look. While this decline may also be an indicator of improved public services and changing attitudes to the environment, a prolonged drop in car sales can’t spell anything good for an economy about to endure a significant test as a no-deal Brexit looks increasingly likely.

And at a time when Britain’s financial landscape hangs in the balance, a purchasing economy dictated by concerns for an uncertain future makes these challenges harder to bear.

This may only be a reflection of anxieties which are yet to materialise, but a decline in consumer demand for any mainstream product will have a tangible knock-on effect to the economy at large.

With a no-deal – or, at best, a disruptive – Brexit on the horizon, the industry is facing an existential challenge, with thousands of jobs set to be impacted. Bad news for carmakers – and for the economy overall.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.