The fourth consecutive fall in new car sales is being blamed on uncertainty over Brexit and the Government’s plans to boost air quality.
The Society of Motor Manufacturers and Traders (SMMT) lashed out at the Government while reporting a decline of 9% in July compared with the same month last year, with just under 162,000 new models sold.
It meant sales were 2.2% down on the year to date.
The SMMT reported a drop of 20% in new diesel sales – with petrol vehicles falling 3% – in a month that saw the Government confirm plans to ban their sale from 2040 in a bid to improve air quality.
Video: New petrol and diesel cars banned from 2040
Ministers are also considering funding measures to cut pollution with a tax on new diesels.
Hybrid and electric sales jumped by almost 65%, with almost 9,000 models sold, the SMMT said.
Its chief executive, Mike Hawes, commented: “The fall in consumer and business confidence is having a knock-on effect on demand in the new car market and government must act quickly to provide concrete plans regarding Brexit.
“While it’s encouraging to see record achievements for alternatively fuelled vehicles, consumers considering other fuel types will have undoubtedly been affected by the uncertainty surrounding the government’s clean air plans.
Video: SMMT: Wrong to penalise diesel
“It is important to remember that there are no plans to charge drivers using the latest Euro 6 models and no proposed bans for conventional petrol and diesel vehicles for some 23 years.”
He suggested prices – many of which were raised after the Brexit vote – could now be coming down in a bid to shift stock.
The boom in sales witnessed in recent years, the SMMT had always admitted, was unsustainable – aided first by PPI compensation payouts to consumers by banks, a rush to avoid car tax changes and by cheap finance.
It insisted there was no bubble in the credit market as regulators fear a surge in deals such as personal contract purchase agreements returning to haunt consumers and lenders alike as the economy stutters towards Brexit.
The SMMT’s director of communications, Tamzen Isacsson, said: “Finance offers an affordable and flexible way for motorists to buy a new car, with fixed monthly payments and APR that are generally lower than for personal loans.
“Car finance is governed by very strict rules, and anyone taking out a package will have the terms and conditions explained to them by the dealer and in writing.
“As with any major purchase, customers are advised to do their own research and to make sure they are getting the best deal on offer, and one that is within their budget.”