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Diesel share of UK new car market to fall to 15%

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Diesel cars face a ‘perfect storm’ that could slash their share of the UK market from a high of around 50% to just 15% by 2025, according to new research published by Aston University.

Figures from the Society of Motor Manufacturers and Traders (SMMT) show diesel sales slumped by 17.1% in 2017 – and that slump is going to worsen, says automotive expert Professor David Bailey.

He believes diesels could face another double-digit slump in 2018 as environmental pressures and consumer confusion take their toll.

Professor Bailey said: “Diesel cars face a raft of challenges, each one of which could damage sales, and which are combining to kill off the domestic diesel sector, which was so rattled by the ‘Dieselgate’ scandal.

“They face a ‘perfect storm’ of bad PR over pollution, coupled with concerns over increasingly strict regulations and sinking second-hand values.

“Sales of diesels are set to fall by up to 10% in 2018, and they could have as little as 30% of the market by 2020 – shrinking rapidly to 15% by 2025. And this is despite diesels accounting for 50% or more of the market just a few years ago.”

The crisis for diesels comes as the SMMT figures showed that Britain’s booming car sales – which boosted the UK’s post-crash economy – appear to have peaked.

A survey of 1,000 UK firms also found that 62% of large businesses, with between 250 and 499 staff, are considering phasing out their diesel vehicles, compared to just 33% among small firms with less than 10 employees, according to RAC Business.

Furthermore, nearly half (47%) of businesses of any size say they are thinking about moving away from diesel.

Professor Bailey said: “The car market has been over-trading for some time now, which is why 2016 remains one of the best years on record for car sales despite the marked slowdown in overall purchases.

“But it’s hardly good news for the sector. None of the factors acting as a brake on car sales has gone away: wages are being squeezed, inflation is creeping up. Then factor in interest rate rises and an ongoing strengthening of European car markets, cutting the number of cheap vehicles offloaded on the UK, and we could be looking at another cut in sales of between 5 and 10% in 2018.”

On the plus side, Professor Bailey expects to see some areas of growth, particularly among petrol/hybrid vehicles and the expanding selection of electric cars.

He is also calling for a diesel scrappage scheme to help boost the move to electric vehicles.

He said: “Governments have missed several opportunities to encourage drivers to switch to electric vehicles, starting way back in 2001 when there was a misconceived drive to get people to opt for diesels.

“Now that it’s clear diesel is dying a slow death, the time is right for the government to take the initiative and offer up scrappage benefits to those who are prepared to ditch their diesels and switch to electric cars.”

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Comments

  • Robberg - 10/01/2018 11:38

    This is a typical case of government weakness and the power of the mass media to mislead. Yes, get rid of older diesel (and petrol) vehicles, but there’s nothing wrong with a modern diesel compared to a modern petrol car. Don’t CO2 emissions matter anymore? Changing from diesel to petrol can be a short sighted, knee jerk reaction just to appease certain bodies. I’m sure that a lot of drivers won’t be happy getting a petrol car that typically does 10 to 15 mpg less than a diesel when they pay for their own fuel, not to mention the additional fuel cost to the business for work mileage. The government don’t care as they will receive more VAT and fuel duty due to the increased amount of fuel purchased. Hybrids aren’t much better than a petrol car unless driven like a Sunday afternoon driver. Electric could be the answer but is still far from a viable alternative until three issues are sorted out; range, cost to buy and infrastructure.

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