UK car sales slide in 2017 on Brexit, diesel fears

London – UK car sales suffered their biggest annual slide since the global recession, stunted by Brexit's impact on buyer confidence and lingering scepticism over the emissions performance of diesel cars.

Sales fell 5.7% in 2017 to 2.54 million vehicles, the steepest drop since 2009, according to the Society for Motor Manufacturers and Traders (SMMT).

Demand for diesel autos slumped 17%, with a swing back to gasoline models prompting the first annual increase in carbon emissions since records began in 1997.

Sales in December fell 14% to 152,473 vehicles. SMMT CEO Mike Hawes said further declines were likely over the next few months.

"The first quarter is going to be tough and March (last year) in particular was an all-time record month. We ain't going to get that next March," he said.

The decline in sales from record levels in the past two years comes as uncertainty surrounding the outcome of Brexit negotiations weighs on consumer sentiment and the drop in the value of the pound crimps Britons’ spending power. The slide is set to continue next year, with the SMMT forecasting a sales dip of 5% to 7%.

"The market is still close to historic highs, nevertheless we are seeing a decline, which is a concern," Hawes said in a briefing in London.

"The two main reasons are business-led and consumer confidence and the confusion around diesel which has caused hold-off," he said of last year's fall.

Concerns over the rigged emissions-testing of diesel cars from Volkswagen Group and other automakers is also discouraging owners from purchasing new vehicles, while others have switched to gasoline-powered models, a trend that has reversed a 19-year run of annual declines in new car emissions.

Initial data shows such autos emitted 121.04 grams of CO2 per km in 2017, up 0.94 grams from a year earlier.

Britons bought 119,000 hybrid and fully electric vehicles in 2017, or 4.7% of total sales. Some 87 alternatively-fueled models are currently available in the UK market, Hawes said.

Reuters contributed to this report