‘Perfect storm’ set to slash diesel’s share of UK market

Diesel cars face a ‘perfect storm’ that could slash their share of the UK market from a high of around 50% to just 15% by 2025, according to experts at Birmingham’s Aston University. Figures from automotive trade body the SMMT show diesel sales slumped by 17.1% in 2017 – and that slump is going to worsen, says Davis Bailey, automotive expert and Professor of Industry at Aston Business School.

Professor Bailey believes diesels could face another double-digit slump in 2018 as environmental pressures and consumer confusion take their toll. He says: ‘Diesel cars face a raft of challenges, each one of which could damage sales, and which are combining to kill off the domestic diesel sector, which was so rattled by the “Dieselgate” scandal. They face a “perfect storm” of bad PR over pollution, coupled with concerns over increasingly strict regulations and sinking second-hand values.’

‘Sales of diesels are set to fall by up to 10% in 2018, and they could have as little as 30% of the market by 2020 – shrinking rapidly to 15% by 2025. And this is despite diesels accounting for 50% or more of the market just a few years ago.’

The crisis for diesels comes as the SMMT figures showed that the UK’s booming car sales – which boosted the UK’s post-crash economy – appear to have peaked. Professor Bailey continues: ‘The car market has been over-trading for some time now, which is why 2016 remains one of the best years on record for car sales despite the marked slowdown in overall purchases. But it’s hardly good news for the sector. None of the factors acting as a brake on car sales has gone away: wages are being squeezed, inflation is creeping up. Then factor in interest rate rises and an ongoing strengthening of European car markets, cutting the number of cheap vehicles offloaded on the UK, and we could be looking at another cut in sales of between 5% and 10% in 2018.’

On the plus side, Professor Bailey expects to see some areas of growth, particularly among petrol/hybrid vehicles and the expanding selection of electric cars. He is calling for a diesel scrappage scheme to help boost the move to electric vehicles. ‘Governments have missed several opportunities to encourage drivers to switch to electric vehicles, starting way back in 2001 when there was a misconceived drive to get people to opt for diesels. Now that it’s clear diesel is dying a slow death, the time is right for the government to take the initiative and offer up scrappage benefits to those who are prepared to ditch their diesels and switch to electric cars.’

Photo: David Bailey/Aston University