New car sales fell by 2.9 per cent in October as the industry continues to grapple with strict new emissions standards and confusion over diesel policy.
Figures released today by the Society of Motor Manufacturers and Traders (SMMT) show new vehicle registrations fell to 153,599 in October.
Overall, the new car sector remains down by 7.2 per cent for the year to date, compared to the same period last year.
SMMT said a stricter emissions test, which came into effect last summer, has led to backlogs at test houses and caused shortages for some brands. It also blamed continuing uncertainty over government policy on diesel for a 21.3 per cent plummet in demand for new low emission vehicles.
MPs have urged the government to ban diesel and petrol cars by 2032, instead of 2040, when the government hopes only electric cars will hit UK roads.
The latest drop in new car sales follows a decline of 20 per cent in September. Both the private and fleet sectors were hit by October's slump, with registrations down one per cent and 5.2 per cent respectively.
However, the SMMT hopes the gap will narrow over the rest of the year as the industry adapts to regulatory changes as demand for hybrid and plug-in vehicles increased by 30.7 per cent before the government scrapped subsidies for alternative-fuelled cars in November.
According to industry forecasts, demand for such vehicles will increase 82.5 per cent from 2017 levels by 2020, reaching a market share of four per cent. However, this lags behind government ambitions, with the SMMT predicting the subsidies cut will further damage sales.
Mike Hawes, SMMT chief executive, said:
[Vehicle tax] upheaval, regulatory changes and confusion over diesel have all made their mark on the market this year so it’s good to see plug-in registrations buck the trend. Demand is still far from the levels needed to offset losses elsewhere, however, and is making government’s decision to remove purchase incentives even more baffling.
We’ve always said that world-class ambitions require world-class incentives and, even before the cuts to the grant, those ambitions were challenging. We need policies that encourage rather than confuse. Government’s forthcoming review of the Worldwide Harmonised Light Vehicle Test Procedure's (WLTP's) impact on taxation must ensure that buyers of the latest, cleanest cars are not unfairly penalised else we will see older, more polluting cars remain on the road for longer.
James Fairclough, chief executive of AA Cars, added: “If the government really does want to see the wider take-up of alternative fuelled vehicles, it needs to make sure it doesn’t pull the plug out from under this burgeoning sector by removing incentives before they have a chance to properly bed-in.
"What’s really needed to encourage growth in the electric vehicle sector is a rapid increase in the number of public chargers as the AA’s own research suggests this is one of the greatest barriers to EV ownership."