UK new car sales fall by 8.5% in May with diesel down 20%

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New car sales continue their fall this year, with registrations down 8.5 per cent in the month of May, according to the latest figures from the Society of Motor Manufacturers and Traders.

Last month, the industry body blamed the 20 per cent drop in registrations in April on the new, higher Vehicle Excise Duty rates introduced in the beginning of the month. It now says the drop in May's registrations is still a result of the market feeling the effects of the higher VED.

New car registrations reached 186,265 in May this year, down 8.5 per cent compared to the same month last year. Overall registrations for the year totalled 1,158,357, down just 0.6 per cent compared to this time last yeaR.

Diesel cars continue to decline in popularity, with 81,489 registered in May, down by 20 per cent compared to last year. Diesel registrations for the year are also down 8.8 per cent, while petrol registrations are up 5.8 per cent. Alternative fuel vehicles continue to enjoy huge growth, recording a 27.2 per cent rise in registrations. The SMMT says almost 50,000 new AFVs have joined Britain's roads so far this year.

Business buyers were the only sector that registered an increase in registrations in May. Both private and fleet buyers were down, with private purchases falling by 14 per cent, while fleet business saw a 5.3 per cent drop.

Mike Hawes, SMMT Chief Executive said: “We expected demand in the new car market to remain negative in May due to the pull-forward to March – which was an all-time record month – resulting from VED reform. Added to this, the general election was always likely to give many pause for thought and affect purchasing patterns in the short term. Although demand has fallen, it’s important to remember that the market remains at a very high level and, with a raft of new models packed with the latest low emission and connected technology coming to market this summer, we expect the market to remain strong over the year.

"Although demand has fallen, it’s important to remember that the market remains at a very high level and, with a raft of new models packed with the latest low emission and connected technology coming to market this summer, we expect the market to remain strong over the year."