UK car sales rebound from year-long falls: industry

London: Britain’s new car sales rebounded slightly in April, industry data showed Friday, having slid a year earlier on taxation changes for high-polluting diesel vehicles.

New registrations for all cars rose 10.4 percent in April year-on-year to 167,911 vehicles, the Society of Motor Manufacturers and Traders (SMMT) said in a statement.

That was the first increase since March 2017 and snapped a 12-month run of sliding sales, as plunging demand for diesel vehicles offset a surge in electric and hybrid car purchases.

Overall sales began falling in April 2017 after the government overhauled car tax to hike duties on diesel automobiles.

The market’s recovery last month was aided also by the timing of holidays — with Easter Sunday and Easter Monday falling on April 1 and 2 — and freezing March weather conditions which delayed some purchases.

“Demand was affected by a number of factors, including the timing of Easter, which meant two additional selling days this April, and March’s adverse weather, which pushed some deliveries into April,” the SMMT added.

“Most significant, however, were the VED changes that came into force last April, causing a pull forward into March 2017 and a subsequent depressed April market.”

Despite rising overall sales, the sector remains blighted by slumping demand for diesel vehicles, as well as uncertainties arising from Brexit.

The number of new diesel-powered cars plunged 25 percent last month to 51,000, with demand sliding on UK government plans to improve air quality.

Consumers continued to ditch diesel cars for automobiles that are regarded as more environmentally-friendly.

Buyers also remain uncertain about any additional taxes and restrictions the government may seek to introduce for diesel vehicles.

– Brexit –

Britain’s largely foreign-owned car sector meanwhile faces uncertainty over Brexit, with the nation scheduled to leave the European Union in March 2019.

“Political and economic uncertainty will continue to affect the market and further instability could cause additional disruption,” noted SMMT chief executive Mike Hawes.

The industry organisation’s boss, speaking to media last week, added that he saw no major benefit to Brexit for the nation’s car trade.

“I don’t see any big upside with Brexit in term of (automobile) trade,” Hawes said.

“If we go out of the single market, staying in the customs union would not be enough to keep the same system we have today,” he added.

Britain is set to leave both the EU’s customs union and single market following Brexit.

Japanese automakers Nissan and Toyota have long expressed concerns over their British operations and the impact of Brexit on trading access to Europe.

Prime Minister Theresa May kick-started EU divorce proceedings one year ago, and March 29, 2019, has since been set as the date the UK will leave the bloc.