New car sales in the UK dropped fell in January as demand for diesel cars collapsed while hybrid and electric cars surged in popularity, industry figures released today show.
The 1.6 per cent year-on-year drop follows a five month decline in sales, data from the Society of Motor Manufacturers and Traders (SMMT) reveals.
New car sales dropped from last January's 163,615 cars to 161,013 this month as diesel sales plummeted 20.3 per cent compared to last year, dragging new registrations down despite petrol cars' modest increase of 7.3 per cent.
Alternatively fuelled cars, such as hybrid and electric cars, are becoming a more popular option for buyers, as sales increased by 26.3 per cent to grab a market share worth 6.8 per cent.
Despite the government slashing subsidies for plug-in hybrids, the SMMT predicts that alternatively fuelled car sales will increase by over a quarter to 177,000 units by the end of 2019.
Of these cars, 86,000 are expected to be ultra low emission plug in hybrids and battery electric car vehicles.
However, the industry body warned that this falls at the lower end of government expectations as it aims to make least 50 per cent of new car sales to be ultra low emission by 2030.
“To restore momentum, we need supportive policies, not least on vehicle taxation, to encourage buys to invest in new, cleaner vehicles that best suit their driving needs,” said Mike Hawes, chief executive of the SMMT, saying these would cover everything "from the latest petrols and diesels to an ever growing range of exciting electrified vehicles".
“This would be good for the environment and good for the industry and those who depend on it,” he added.
Plug-in cars will account for 3.7 per cent of the market by the end of the year, according to SMMT.
Diesel cars' share of the market fell from 35.9 per cent in January 2017 to 29.1 per cent last month. Petrol cars also had a drop in market share, from 58.8 per cent to 54.1 per cent.