New Car Sales Slump Panic - Really?

Bachelorplace

According to This is Money car sales have dropped in March with a 16% decrease and a 37% decrease in purchase of deisel cars.

But is it clear as to why?

1. Are buyers avoiding desiel due to emissions or pollution?

Surely not, the new EU6 engines are cleaner than many petrols.

2. Is Brexit a concern, leading to uncertainty?

3. Are buyers clued up enough to know about the new VED rules that has hiked the price of taxing the cars?

I think few people know about these new rules - and are just thinking on headlines, rather than fact.

4. What percentage of the decline is for cars over £40,000 as those are the worst taxed - even more so cars like Range Rovers.

I would be interested to hear your theories on why this might be, because as yet there are no clear answers.

It could be as simple as people due to change simply are not, because of the new tax rules. It might be that people are fearful of buying diesels thinking they will be worthless ( again just headlines ).

k12479

Possibly all of those contribute to some extent, but probably not as much as the likes of the SMMT and industry make out. Something rarely mentioned is that car sales, like many industries, are cyclical. The US market appears to have peaked last year, although last month was surprisingly strong. Since the financial crisis, car sales have done better year after year in pretty much all regions, we are now likely at or near the peak of that cycle in Europe/UK too.

Herzlos

The VED changes probably caused a lot of people to bring purchases forward, and an inevitable slump now.
Diesels have gotten a lot of bad press lately, and I think people are getting wise to the real cost savings, with electric cars being an option for those wanting the lowest cost per mile.

Brexit uncertainty will also factor in - if you're not confident about your financial situation, you don't buy a new car.
That said, cars are likely to go up in price post-Brexit, so I'd be expecting some buyers to move things forward to buy them whilst we're still in the EU - maybe that'll result in a boost next year.

Nobbie1967

Herzlos wrote: »

The VED changes probably caused a lot of people to bring purchases forward, and an inevitable slump now.
Diesels have gotten a lot of bad press lately, and I think people are getting wise to the real cost savings, with electric cars being an option for those wanting the lowest cost per mile.

Brexit uncertainty will also factor in - if you're not confident about your financial situation, you don't buy a new car.
That said, cars are likely to go up in price post-Brexit, so I'd be expecting some buyers to move things forward to buy them whilst we're still in the EU - maybe that'll result in a boost next year.

Why would car prices go up after Brexit? The most likely outcome of negotiations on a trade deal is continued tariff free trade, especially as the rest of the EU run a massive trade surplus with us.

daveyjp

Buyers were mugged into buying diesels due to the tax system. All those £0-20 a year cars were too tempting. The mpg figures were however far from honest to get the cheap tax, but mpg wasn't close to what was advertised.

People are also wising up about DPFs EGRs wtc and the costs associated with them.

The graded tax system however also saw great advances in petrol efficiency.

I had a Focus mk1 115 bhp. It did mid 20s around town and 40 was just about possible if I took it steady. Mid 30s was typical.

We now have a 1.5 petrol engine car with 110 bhp.

It does mid 40s mpg around town, 50 at motorway speeds and I expect it to get 60+ on a steady run.

This is as good as the 110 bhp modern diesel I drove during February and March, so it makes no financial sense to buy one. Having had petrols for the last 8 years I also forgot how frustrating manual diesels were to drive.

Car_54

Nobbie1967 wrote: »

Why would car prices go up after Brexit? The most likely outcome of negotiations on a trade deal is continued tariff free trade, especially as the rest of the EU run a massive trade surplus with us.

Cars in UK were historically much more expensive than elsewhere in Europe until about 20 years ago, when the EU outlawed discriminatory pricing. Prices came down overnight.

If Brexit means we're no longer subject to those EU laws, then there will be nothing to stop the manufacturers ripping us off again.

Contrary to what UKIP and the Daily Mail might tell you, EU membership has been pretty good for the consumer.

z1a

Bachelorplace wrote: »

According to This is Money car sales have dropped in March with a 16% decrease and a 37% decrease in purchase of deisel cars.

But is it clear as to why?

1. Are buyers avoiding desiel due to emissions or pollution?

Surely not, the new EU6 engines are cleaner than many petrols.

2. Is Brexit a concern, leading to uncertainty?

3. Are buyers clued up enough to know about the new VED rules that has hiked the price of taxing the cars?

I think few people know about these new rules - and are just thinking on headlines, rather than fact.

4. What percentage of the decline is for cars over £40,000 as those are the worst taxed - even more so cars like Range Rovers.

I would be interested to hear your theories on why this might be, because as yet there are no clear answers.

It could be as simple as people due to change simply are not, because of the new tax rules. It might be that people are fearful of buying diesels thinking they will be worthless ( again just headlines ).

Deisel, desiel, diesel, yes, got it right 3rd attempt.

Herzlos

Nobbie1967 wrote: »

Why would car prices go up after Brexit? The most likely outcome of negotiations on a trade deal is continued tariff free trade, especially as the rest of the EU run a massive trade surplus with us.

I can't remember the company off the top of my head, but there was an in depth analysis for the motoring industry on the impact of Brexit, which concluded that car prices would go up across the board (something like 5-10% for UK build, 10-15% for EU built, and 5% for Asian built).
I assume that includes many factors, such as a weaker GBP or any increase in tariffs/customs/supply line costs could drive the price up further.

I'd certainly bet that they are more likely to go up than down with Brexit; unless sales figures drop even further and dealers need to provide better offers to shift them.

sevenhills

Bachelorplace wrote: »

3. Are buyers clued up enough to know about the new VED rules that has hiked the price of taxing the cars?

I don't know what the new rules are, but you would think that someone buying a new car would know the new rules.

Nobbie1967

Car_54 wrote: »

Cars in UK were historically much more expensive than elsewhere in Europe until about 20 years ago, when the EU outlawed discriminatory pricing. Prices came down overnight.

If Brexit means we're no longer subject to those EU laws, then there will be nothing to stop the manufacturers ripping us off again.

Contrary to what UKIP and the Daily Mail might tell you, EU membership has been pretty good for the consumer.

Yes, I remember almost buying an Impreza Turbo from Holland for £14k when price in the U.K. was nearer £20k. It will be interesting to see whether the car companies can get away with that again, but so much has changed since then, that I doubt it.

NBLondon

sevenhills wrote: »

I don't know what the new rules are, but you would think that someone buying a new car would know the new rules.

You'd think that a sensible person buying a new car would look up the rules as part of the planning process - but if everybody was sensible the car sales trade would do even worse...

I agree with Herzlos - savvy buyers may have decided on the basis of beating last year's changes. M'wife said it was a key factor in changing in March last year rather than any later.