Smith-Jones

Fall in car sales and the implications

Introduction

 

Statistics published by the Society of Motor Manufacturers and Traders (SMMT) indicate that British new car sales have fallen across the board, with diesel models taking the biggest hit.[1] Diesel cars have always been thought of as more environmentally friendly, but recent research and regulations have shown that this may not be the case. This blog intends to look at the statistics relating to the recent fall in car sales and the implications attached to it.

 

What do the statistics say?

 

Until recently, the automotive industry has been doing well, reporting a steady increase in the number of new cars sold year on year for around six years. However, the most recent statistics from December 2017 show that new car sales have fallen by a whopping 152,169, which is 5.7{d0b33ffed4c839fc4b18c811774d92ca1331969f61d589721459b0764cff8e09} less than last year.

The number of new diesel cars being sold has fallen by 17.1{d0b33ffed4c839fc4b18c811774d92ca1331969f61d589721459b0764cff8e09} since last year, which could be down to the announcement of the 2017 Autumn Budget which promised a tax hike on new diesel cars sold from April 2018.[2] This is the result of manufacturers failing to meet emissions testing standards and acts to incentivise them to produce cars which are cleaner for the environment. It is forecasted that diesel sales will continue to fall in the future. Commenting on this fall in diesel car sales, automotive expert, Professor David Bailey of Aston University believes that diesel sales will continue to fall to as little as 15{d0b33ffed4c839fc4b18c811774d92ca1331969f61d589721459b0764cff8e09} of the market by 2025.[3]

Despite the fall in the number of diesel cars sold last year, the number of petrol cars sold continues to rise, indicating that the dive in car sales on the whole can be fully attributed to the plummeting number of diesel cars being sold.

 

Does this mean that petrol cars are better for the environment?

 

Diesel engines are generally more fuel-efficient than petrol engines, using less fuel and more air, whilst offering the same performance as a petrol engine, therefore giving the appearance that they are better for the environment.[4] This is backed up by the fact that petrol cars produce more carbon dioxide emissions (CO2) than their diesel equivalents.

Regardless of the harm that petrol cars cause the environment, the current stigma surrounding diesel cars may deter people from buying diesel, leading instead to a rise in petrol car sales. This may not be such a bad thing as diesel cars produce a greater amount of toxic emissions in the form of nitrogen oxides, including nitrogen dioxide (NO2) which is harmful to humans, and the greenhouse gas, nitrous oxide (N2O).[5] Petrol cars produce 30{d0b33ffed4c839fc4b18c811774d92ca1331969f61d589721459b0764cff8e09} fewer nitrogen oxides, so from this perspective it looks like diesels are more harmful to the environment.

 

Why is the decrease in diesel cars a bad thing?

 

The Telegraph reported that the stigma now attached to diesel cars could in fact lead to older, less environmentally friendly diesel cars staying on our roads.[6] SMMT Chief Executive, Mike Hawes, commented that “This Budget will also do nothing to remove the oldest, most polluting vehicles from our roads in the coming years.”[7] Instead, what the tax proposes to do, is to punish consumers for buying newer, cleaner diesel cars, rather than giving an incentive to scrap older, dirtier ones which are still on our roads.

 

What does this mean for accident statistics?

 

In short, very little. Despite the fall in new sales, there were still over 2.5 million new cars sold in 2017, over a half of which were petrol. As we can see, the fall in sales does not necessarily lead to a reduction in the number of cars on our roads, it just means that there may be older and dirtier cars remaining on our roads. It may be argued that this could lead to an increase in accidents occurring due to vehicle defects, such as defective brakes, steering or suspension. However, it must be noted that only 1,687 accidents occurred in 2016 due to vehicle defects, which only makes up 2{d0b33ffed4c839fc4b18c811774d92ca1331969f61d589721459b0764cff8e09} of accidents which occurred that year.[8] Therefore, the fall in new car sales would not have much of an impact on the overall number of accidents that occur on our roads, as most accidents occur due to driver error.

 

What about electric and hybrid cars?

 

On the plus side, cars which run on alternative sources of fuel (known as ‘Alternatively-Fuelled Vehicles’ or ‘AFVs’) including electric cars and hybrid cars, have been increasing rapidly since before 2010. In 2017, just under 120,000 of these vehicles were sold, which is five times the amount that were sold in 2010.[9] It could be argued that this welcoming change is the result of diesel not being perceived as an environmentally viable source of fuel and the increased awareness of climate change. In realising this, people are more inclined to turn to AFVs in an effort to reduce their carbon footprint. These vehicles now make up 4.7{d0b33ffed4c839fc4b18c811774d92ca1331969f61d589721459b0764cff8e09} of the market, which is a record high for vehicles of this type.

 

Conclusion

 

The dive in new diesel car sales last year led to a fall in the total number of car sales that year. It appears that this fall may be the result of recently announced government tax hikes on new diesel cars that fail to meet emissions standards. Even though this appears to be a good measure, it may lead to an increase in petrol car sales and thereby an increase in general CO2 emissions. Unfortunately, this will have no substantial effect on the number of accidents that occur. However, a positive amongst all these statistics is that it could lead to a greater acceptance of electric, or hybrid vehicles, which come with tax incentives and are better for the environment.

 

[1] Society of Motor Manufacturers and Traders, ‘SMMT Vehicle Data’ <https://www.smmt.co.uk/vehicle-data/>

[2] RAC, ‘Diesel car tax rises – who will be affected and by how much?’ (Published 23rd November 2017) <https://www.rac.co.uk/drive/news/motoring-news/2017-diesel-car-tax-rises/>

[3] The Independent, ‘Diesel’s UK market share to keep plummeting over next seven years, research shows’ (Published 8th

[4] BBC News, ‘Diesel cars: Your questions answered’ (Published 9th January 2018) <http://www.bbc.co.uk/news/business-42621112>

[5] The Conversation, ‘Fact Check: are diesel cars really more polluting than petrol cars?’ (published 2nd May 2017) <http://theconversation.com/fact-check-are-diesel-cars-really-more-polluting-than-petrol-cars-76241>

[6] The Telegraph, ‘Diesel backlash means new cars on UK roads pumping out more CO2’ (Published 5th January 2018) <http://www.telegraph.co.uk/business/2018/01/05/diesel-backlash-means-new-cars-uk-roads-pumping-co2/>

[7] Society of Motor Manufacturers and Traders, ‘SMMT response to the Autumn Budget 2017’ (Published 22nd November 2017) <https://www.smmt.co.uk/2017/11/smmt-response-autumn-budget-2017/>

[8] Department for Transport, Reported Road Casualties Great Britain 2016, 266 (Table RAS50001, Published 28th September 2017) <https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/668504/reported-road-casualties-great-britain-2016-complete-report.pdf>

[9] Society of Motor Manufacturers and Traders, ‘SMMT Vehicle Data’ <https://www.smmt.co.uk/vehicle-data/>