The UK new car market declined again in October, with 153,599 vehicles registered, according to the Society of Motor Manufacturers and Traders.
Deliveries fell by -2.9% in the month, as model changes and backlogs at test houses conducting tough new WLTP emissions certification continued to cause shortages across some brands. Wales bucked the trend with a 6% rise to 5,721 new cars registered.
|Declines were seen in both private and fleet sectors, with registrations down -1.0% and -5.2% respectively. Meanwhile, continuing uncertainty over government policy on diesel saw demand for these new, low emission vehicles fall by a further -21.3%.
Registrations of petrol cars rose +7.1%, while the market for alternatively fuelled vehicles (AFVs) once again showed strong growth, up +30.7%, supported by new models.
Zero emission battery electric vehicles saw particularly impressive growth, up +86.9%, as 584 more people drove one home than in the same month last year. Hybrid and plug-in hybrid vehicles, which make up the majority of AFV sales due to their greater flexibility, also enjoyed strong uplifts, growing +31.0% and +19.1% respectively.
However, this is not surprising given the announcement that the Plug-in Car Grant was to be cut for pure electric cars and withdrawn completely for plug-in hybrids – although, due to lead times, the full impact may not be seen for several months.
|Mike Hawes, SMMT Chief Executive, said, “VED upheaval, regulatory changes and confusion over diesel have all made their mark on the market this year so it’s good to see plug-in registrations buck the trend.
“Demand is still far from the levels needed to offset losses elsewhere, however, and is making government’s decision to remove purchase incentives even more baffling.
“We’ve always said that world-class ambitions require world-class incentives and, even before the cuts to the grant, those ambitions were challenging. We need policies that encourage rather than confuse. Government’s forthcoming review of WLTP’s impact on taxation must ensure that buyers of the latest, cleanest cars are not unfairly penalised else we will see older, more polluting cars remain on the road for longer.”
The figures come as SMMT publishes new industry forecasts for AFV demand, with registrations expected to grow +82.5% from 2017 levels by 2020. Similar growth (+88.3%) is projected for plug-in electric cars, with 92,620 new plug-in hybrid and battery electric cars expected to be sold in the same year – taking market share to around 4.0%.
This is at the lower end of government’s 3-7% stated ambition, with cuts to the Grant further undermining industry’s ability to deliver this ambition.
October top ten
|Ford Fiesta||Ford Fiesta|
|VW Golf||Ford Kuga|
|MB A-Class||VW Tiguan|
|VW Tiguan||Ford EcoSport|
|Ford Focus||Peugeot 2008|
|Ford Kuga||MG ZS|
|Nissan Qashqai||Ford Focus|
|BMW 3 Series||Renault Captur|
|VW Polo||VW Golf|
Seán Kemple, Director of Sales at Close Brothers Motor Finance, said, “A lack of stock, confusion around WLTP, and economic uncertainty around Brexit continue to keep dealers awake at night.
“We are seeing a number of manufacturers reducing their targets for the end of the year, recognising the challenges in selling cars at the moment. While the Budget addressed issues of potholes and road condition, it did little to provide clarity on whether consumers should buy electric or petrol, nor did it help the ongoing demonisation of diesel. Instead, it is left to the dealers themselves to get the message out about what the appropriate vehicles would be.
“As such, we’re seeing dealers shifting to used stock, which will make for interesting reading later this month with the used transactions figures from the SMMT. Attractive pricing and effective advertising of stock, as well as providing customers with expertise and advice, will be key in the next couple of months. Now is also the perfect time to ensure that after sales propositions are up to scratch, and that dealers are making the most of the optional extras available to offer customers.”
Alex Buttle, director, from comparison website Motorway.co.uk, added, “These latest figures suggest new car sales are entrenched at a sub-par level for the long term. The industry is gearing up for a cold, hard winter that could stretch long into 2019 and beyond.
“A fatal combo of interest rate fears, Brexit concerns and confusion over fuel types sees the industry locked in the deep freeze and in a perpetual battle to pick itself up off the floor.
“Again, diesel sales are a heavy burden on overall numbers, with October seeing new registrations fall for the 19th consecutive month. Unfortunately, petrol just cannot pick up the slack at the heart of the industry anymore.
“AFV sales, after spluttering a little in September, did at least get back on the right track in October, and a 30% rise does suggest some cause for optimism. However, the government’s bizarre decision to cut funding towards the Plug-in Car Grant could well blunt that growth in months ahead.”