The British Car Market Is Flushing Itself Down the Loo; Industry to Follow?

Matt Posky
by Matt Posky

After four years of consecutive growth, the United Kingdom’s automotive market has tanked for 12 months straight. The culprit is, of course, dwindling diesel sales.

Thanks to European governments latching onto the fuel as the cleaner alternative to “petrol” throughout the 1990s (subsequently incentivizing the fuel as a way to meet aggressive CO2-reduction targets), diesel-powered autos accounted for roughly half of all new auto sales between 2009 and 2017 . But diesel is now “evil” and everyone in Europe has started avoiding it.

In March, diesel sales declined by 37.2 percent — leaving the once dominant fuel with just 32 percent of the new car market. Unsurprising, as the new trend in Europe is the widespread (future) banning of the fuel in city centers. April’s sales are expected to be even lower, as the British government’s new taxes on diesel vehicles come into effect. Those fees and a weakened pound, which practically everyone has attributed to Brexit, forced new car sales in the UK down by 16 percent.

While February fared slightly worse, seeing a 17 percent decline, the general consensus was that March would perform much better. However, that was not to be the case. It’s not just the country’s market that’s taking a beating, either. Production matched the sales shortfall in the same month — down 17 points. In fact, the U.K.’s auto production volume has shrunk for almost eight months now. The Society of Motor Manufacturers and Traders (SMMT) cited British year-to-date production for the home market as down by almost 12 percent through February.

With environmental pressures and consumer confusion on the rise throughout Europe, it’s unlikely to see diesel cars making a comeback. Politicians are extremely focused on air quality issues and have taken to vilifying diesel — the same fuel governments unilaterally endorsed a decade earlier. Consumers are now worried about diesel bans and how strict emissions regulations might affect their next purchase. There are even proposals that the European government should employ a federal vehicle scrapping scheme to get diesels off the road and encourage the public to buy new vehicles.

“The decline in demand for diesel cars continues to be of concern and the latest tax changes announced by the government do nothing to encourage consumers to exchange their older diesel vehicles for new lower emission models,” Mike Hawes, chief executive of the SMMT told the Financial Times this week. “All technologies, regardless of fuel type, have a role to play in helping improve air quality whilst meeting our climate change targets, so government must do more to encourage consumers to buy new vehicles rather than hang onto their older, more polluting vehicles.”

Hold on there, Mike. Unless someone is buying a vehicle that gets vastly superior gas mileage (or sources its electric energy from renewable resources), it’s usually better for the environment to hold onto that beater. We know the SMMT is honor-bound to promote new car purchases, but let’s at least get the facts straight.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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