UK new car sales fall 8.5 percent in May ahead of election

Cars are displayed outside a showroom in west London October 4, 2013. REUTERS/Luke MacGregor

LONDON (Reuters) - British new car registrations fell 8.5 percent last month, an industry body said on Monday, blaming the decline on the run-up to this week’s national election and the effect of an April tax hike which boosted demand earlier in the year.

Car sales dropped to 186,265 vehicles in May, with a 14 percent slump in demand to consumers and a 5.3 percent drop in fleet business registrations, according to data from the Society of Motor Manufacturers and Traders (SMMT).

“We expected demand in the new car market to remain negative in May due to the pull-forward to March,” SMMT Chief Executive Mike Hawes said, referring to a rise in vehicle excise duty which boosted demand before it came into effect in April.

“Added to this, the general election was always likely to give many pause for thought and affect purchasing patterns in the short term,” he said.

Demand for diesel continued to fall last month with demand down 20 percent, as a series of tax hikes in London and possible levies in other cities continued to dampen demand.

Reporting by Costas Pitas; Editing by William Schomberg