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UK car sales plunge after tax change

2017-05-09 12:47

MASSIVE DECLINE: UK car sales fell by 19.8% in April 2017 from a year earlier to 152 076 vehicles data showed. Image: AFP / Adrian Dennis

London - Earlier this month Wheels24 reported on the dramatic decrease in vehicle sales in April 2017,  the National Association of Automobile Manufacturers of South Africa (Naamsa) said it could be attributed to public holidays during the month.

New car sales in Britain also dived in April from a record high but for a different reason as motorists reacted to a tax overhaul that has ramped up prices, industry data showed Thursday (May 4).

Sales fell by 19.8% last month from a year earlier to 152 076 vehicles, industry body the Society of Motor Manufacturers and Traders (SMMT) said in a statement.

Diesel car sales down 27.3%

The April decline followed record-breaking growth in previous months as buyers brought forward purchases ahead of the tax-rule change, which came into force on April 1.

The rule change means that all new cars, except for those with zero CO2 emissions, are now subject to an annual flat-rate charge.

Research from the RAC roadside breakdown service indicates that most drivers purchasing new cars are now paying significantly more under the new regime.

SMMT Chief Executive Mike Hawes said: "With the rush to register new cars and avoid VED tax rises before the end of March, as well as fewer selling days due to the later Easter, April was always going to be much slower."

SA's new vehicle sales: Huge slump in April 2017

He added: "We therefore expect demand to stabilise over the year as the turbulence created by these tax changes decreases."

Sales fell across the board, with diesel cars down 27.3%, petrol down 13.1% and hybrid and electric vehicles, which had skyrocketed in previous months, falling back 1.3%.

On a year-to-date basis, sales were still up 1.1% to 972 092 vehicles, thanks to a strong first quarter.

The best-selling car in Britain last month was the Ford Fiesta, followed by the Nissan Qashqai, with the Mercedes C-Class in third place.


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