Are GTi sales in the UK really flagging???
In a very unscientific way I'd say "yes".
When the mk5 was at its peak hot hatch sales were very strong, there were STs and VXRs and other sporty hatches everywhere but times have changed and the hot hatches have either become company Diesels (FRs and GTDs and whatever the Ford and Vauxhall equivalents are plus BMW 120s etc) which offer 90% of the real world performance with excellent economy and low running costs or more specialised machinery like the Megane RS thingy and the Cooper Works.
VW have recognised the change in the market naturally and hence we have the PP GTI that offers a balance between the standard GTI's well thought out blend of spec vs cost vs all rounder family car with sporting touches and a more focussed tech laden hot hatch.
Reading the bits saying the diff doesn't handle more than 260 bhp makes us see why VW limited the PP to 10 bhp more so the next obvious thing to do with a niche car is to save weight if you can't give it masses of extra power.
The R is even more of an expensive niche car and you don't see that many GTIs or R's on the roads even now (plenty of GTDs) after the mk6 has been in production for 4 years.
You see mk5 GTIs everywhere. You see mk4 GTIs everywhere.
So yes, I can believe the market has changed and thus the GTI has become very much a niche car again. The Scirocco probably dilutes the GTI market even more.
And the limited production VW do doesn't help to increase sales as I'm sure there are a lot of people on car contracts that can't allow for the long lead times when the vehicle they have has to be returned by a set date and you can get a 1 series or Astra or Focus or whatever almost right away.