December 2018
Source SMMT
Spread the love

FALLING consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes combined to create a highly turbulent market UK new car market which declined by 6.8% in 2018.

Figures from the Society of Motor Manufacturers and Traders show annual registrations falling for a second year to 2,367,147 units. A 5.5% decline in December capped a difficult year.

Private, fleet and business registrations all fell during the year, with the biggest losses felt in the fleet sector (down 7.3%), while private motorists and smaller business operators were down -6.4% and 5.6% respectively.

Demand also fell across all vehicle segments bar the dual purpose category, which grew by 9.1% to take a fifth of the market (21.2%). Despite registrations of superminis and lower medium cars falling by 2.5% and 9.4% respectively, smaller vehicles remained the most popular – with a combined 58.7% market share.

The biggest volume decline was seen in the diesel sector, down 29.6% in 2018, with the volume loss equivalent to some 180% of the overall market’s decline.

Anti-diesel rhetoric and negative fiscal measures took their toll, with December marking the 21st consecutive month of decline for the fuel type – despite new emissions tests showing diesels deliver in the real world.

Growth in registrations of petrol (+8.7%) and alternatively fuelled vehicles (+20.9%) replaced some of the loss but not enough to offset the full shortfall as many diesel owners adopt a ‘wait and see’ approach, keeping hold of their older, more polluting vehicles for longer.

In the AFV sector, petrol electric hybrids remained the most popular choice, up 21.3% to 81,156 units. Plug-in hybrids (PHEVs) also recorded a strong uplift (24.9%) over the year, though the figures suggest growth is slowing following the removal of the Government’s plug-in car grant for these vehicles in October.

Demand for PHEVs grew almost 30% in the first 10 months, but year on year increases fell to 3.1% and 8.7% in November and December respectively. Pure electric cars, meanwhile, grew 13.8% in the year but, with just 15,474 registered, they still make up only 0.7% of the market. Given the reduction in government incentives, the pace of growth of plug-in cars is now falling significantly behind the EU average.

Source SMMT

The figures come as SMMT publishes data showing the UK new car fleet average CO2 rose for a second successive year, by 2.9% to 124.5g/km, despite huge investment by manufacturers to deliver ever more efficient cars, with the average new or updated model emitting -8.3% less CO2 than that it replaced.

While part of this fleet average CO2 increase was due to segment shift and the introduction of the new WLTP test which produces higher figures, the move away from diesels is having a significant impact, the SMMT said.

It added that diesels are, on average, 15-20% more efficient than petrol equivalents and so have a substantial role to play in addressing climate change.

Hard won gains made by the sector since CO2 records began in 1997 (when the new car fleet average was 189.8g/km) are being undermined by the shift away from diesel and disappointing growth in alternatively fuelled vehicles, underscoring the challenge both industry and government face in meeting ambitious climate change targets.

Mike Hawes, SMMT Chief Executive, said: “A second year of substantial decline is a major concern. The industry is facing ever-tougher environmental targets against a backdrop of political and economic uncertainty that is weakening demand so these figures should act as a wake-up call for policy makers.

“Supportive, not punitive measures are needed to grow sales, because replacing older cars with new technologies, whether diesel, petrol, hybrid or plug-in, is good for the environment, the consumer, the industry and the exchequer.”

Despite the overall decline in 2018, demand for new cars in the UK remains solid, with volumes on a par with the preceding 15-year average, and the market still the second biggest in the EU, behind Germany.



Please enter your comment!
Please enter your name here