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New car sales see biggest fall since 2008

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New car sales fell by 7% last year in the biggest annual drop since 2008, according to preliminary industry figures.

A slump in demand for diesel, stricter emissions rules, and falling consumer confidence ahead of Brexit were blamed for the decline.

Figures from the Society of Motor Manufacturers and Traders (SMMT) showed 2.37 million new cars were sold in 2018, down more than 174,000 on the previous year.

The 7% fall was the second year in a row of decline and the largest drop since demand fell by 11% during the financial crisis a decade ago.

SMMT chief executive Mike Hawes said the past year had been “highly turbulent”. The trade body is forecasting a further 2% decline in 2019.

Mr Hawes said: “The challenges before us are something of a perfect storm.”

The key factor in the decline for last year was a 30% drop in diesel sales – with the SMMT blaming a “lingering sense of uncertainty” over how diesel cars will be taxed and treated after the Volkswagen emissions cheating scandal in 2015.

Petrol car sales were up by 9% while alternatively-fuelled vehicles such as plug-in hybrids or electric cars were up 21%.

Another factor affecting car sales was the implementation of a new EU emissions testing procedure which came into force in September and was blamed for a supply shortage in the autumn.

Mr Hawes said it would be unfair to attribute too much significance to concerns over Brexit when explaining the fall in new car sales.

But he said that falling consumer confidence had reduced consumers’ appetite for a “big ticket purchase”.

The SMMT, like other business bodies, is calling for MPs to back Theresa May’s Brexit agreement and avoid a no-deal scenario.

It says that crashing out of the EU without an agreement risked destroying the car manufacturing industry, which employs more than 850,000 people in the UK.

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