Record sales of AFVs in February as overall market dips slightly

The UK new car market remained steady in February, dipping just -0.3 per cent, according to figures released by SMMT. 83,115 vehicles were registered in traditionally one of the quietest months of the year ahead of the number plate change in March. Fleets drove the market, with 45,699 cars registered, up 3.3 per cent, while private demand fell -4.4 per cent to 36,018 units and business registrations declined -5.3 per cent to 1,398.

Following January’s strong performance, buyers registered a record 3,308 alternatively fuelled vehicles (AFVs) in February, a 48.9 per cent uplift on 2016, taking a 4.0 per cent market share. This was partly driven by new AFV models going on sale, a result of major investments by manufacturers into cutting edge, fuel-efficient technology. Petrol registrations experienced an increase – rising 5.8 per cent to 42,826 units – while demand for diesel cars fell -9.2 per cent compared to the same month in 2016.

Mike Hawes, SMMT chief executive, said: “February is traditionally one of the quietest months of the year and a steady performance was expected following another year of record growth in 2016. We expect to see the market bounce back in March as buyers take advantage of the new ’17-plate, as well as the last chance to buy a car eligible for current lower VED rates before they change on 1 April.”

Commenting on the figures, Sue Robinson, director of the National Franchised Dealers Association (NFDA), said: “It is positive to see the alternatively fuelled vehicle market performing well, up 48.9 per cent, and growing market share. The skill and expertise of technicians at franchised dealers make our members best placed to service this growing market”.

Robinson continued: “While alternative fuel vehicles continue to grow, they still represent a small portion of the market and more needs to be done to support their introduction.

“Higher numbers of low emission vehicles on UK’s roads could bring several benefits including significant gains in air quality. The Government though must ensure that a well-thought-out strategy, coordinated with both manufacturer and dealers, will be implemented. This should look at developing the right infrastructure and promoting incentives to support consumer confidence.

“We are now looking forward to a buoyant March with the plate change which could mark a positive finish to the first quarter.”

Jon Maycock, managing director of Asset Finance at Hampshire Trust Bank, commented: “With many waiting until March’s new registration plates before purchasing a vehicle, today’s slight drop in numbers is not surprising. While many are predicting that vehicle prices could rise at some point in 2017, there are still plenty of attractive finance packages out there. Small business owners who are looking to invest in a vehicle this year should focus on partnering with brokers and lenders who can give them the key to the best asset finance deal.”