UK new car registrations declined for a fourth consecutive month in June, with year-on-year demand falling by -4.9% to 223,421 units, according to the Society of Motor Manufacturers and Traders.
Some 1,269,245 new cars joined British roads in the first half of the year, down -3.4% as ongoing confusion over low emission zones and diesel, the removal of key ultra low emission vehicle incentives and an overall decline in buyer confidence affected the market.
The Government’s decision to reduce its financial incentive to buy a low carbon car has slowly affecting their sales since last year, and there have been calls for reintroduction.
In the month Ford said it was closing their Bridgend Engine Plant, the car maker has seen a plunge in registrations it has normally dominated in Wales.
Wales was the only part of the UK to see sales rise in June, but it was not good news for Ford.
Total registrations went up 5.73% to 7,753 new cars and that means it also had the lowest decline over the first six months, with deliveries down just 1.64% to 42,691.
Top ten in Wales last month
Vauxhall Mokka X
Mike Hawes, SMMT Chief Executive, said, “Another month of decline is worrying but the fact that sales of alternatively fuelled cars are going into reverse is a grave concern.
“Manufacturers have invested billions to bring these vehicles to market but their efforts are now being undermined by confusing policies and the premature removal of purchase incentives.
“If we are to see widespread uptake of these vehicles, which are an essential part of a smooth transition to zero emission transport, we need world-class, long-term incentives and substantial investment in infrastructure.”
Fleet renewal remains the quickest way to address environmental concerns today and consumers should have the confidence – and support – to choose the new car that best meets their driving needs, whatever the technology, secure in the knowledge that it is safer and cleaner than ever before, he added.
Seán Kemple, Director of Sales at Close Brothers Motor Finance, said, “The issues in motor manufacturing and supply are taking their toll on car registrations, leaving dealers feeling the pressure.
“The delays caused by a WLTP-induced bottleneck and a tricky auction environment mean dealers are struggling to meet the demands of their customers and bottom lines alike.
“The weather has not helped our case; a rainy June left buyers hesitant to hit the high street, and that included big ticket purchases like cars. As we move towards the traditional summer slowdown, dealers must be sure to focus on their digital showroom – customers looking for AFVs or specific makes and models are using social media and forums more than ever and it’s crucial that dealers are including this sort of outreach in their planning.”
James Fairclough, CEO of AA Cars, said, “It’s another disappointing month for the new car sector as the number of registrations continues to slide for the fourth consecutive month.
“The decline can be attributed to several factors. There is a movement among young people, who are often more environmentally aware, to be part of a sharing and rental economy in which they have less desire to ‘own’ a car, but are happier to rent, lift share, or use an Uber on the occasions where they need a vehicle.
“Equally, while car finance is widely available and often very competitive, Brexit uncertainty is keeping parts of the industry in flux and leading many would-be buyers to defer their purchases.
“Also, the recent popularity of PCP loans has injected a large number of nearly new cars into the second hand market, encouraging some people to buy used instead of new. This shift has been good news for the used car market, which saw sales hold steady in the first quarter of the year, with a modest drop of 0.6%.
“What’s most surprising from today’s data is that the ever so popular alternatively fuelled vehicles (AFVs), have recorded a drop in sales for the first time since April 2017. Plug-in hybrids continued the recent downward trend, with sales decreasing by more than half (50.4%), while hybrids recorded a decline of 4.7%.
“Despite the fact that the UK has just become the first major economy to set a net zero target on greenhouse gas emissions for 2050, there is ongoing confusion over low emission zones. Also, there is no doubt that the removal of ultra low emission vehicle (ULEV) government grants has impacted the market.”
Sue Robinson, Director of the National Franchised Dealers Association added, “It is disappointing to see demand for alternative fuel vehicles decline, but it is positive that sales of pure electric vehicles maintained their positive trend despite significant supply constraints.
“Franchised dealers are making significant investments to be able to educate their customers and provide them with the best possible experience in this developing area of the market.
“The decline in fleet registrations is largely due to the confusion surrounding the Government’s company car tax regime. It is important that the Government addresses the negative impact the current tax regime is having on company cars.
“As uncertainty continues to have an effect on new car sales, used and nearly new cars, as well as aftersales, remain key areas of focus for franchised retailers”.