UK new car registrations – the decline continues

The UK new car market declined for a sixth consecutive month in September, with 426,170 new units registered, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT). Registrations fell by -9.3 per cent in this key month, as economic and political uncertainty, and confusion over air quality plans led to a fall in consumer confidence.

Demand from business, fleet and private buyers all fell in September, down -5.2 per cent, -10.1 per cent and -8.8 per cent respectively. Meanwhile, registrations fell across all body types except dual-purpose, which grew 2.4 per cent. The biggest declines were seen at opposite ends of the market with both luxury saloons and superminis falling -36.4 per cent and -21.2 per cent respectively.

Demand for alternatively fuelled vehicles (AFVs) continued to accelerate in September however, surging 41.0 per cent in the month and 34.6 per cent year-to-date, with nearly 95,000 leaving forecourts this year. However, this couldn’t compensate for declines in registrations of petrol cars, down -1.2 per cent, and, especially, diesel which fell for the sixth consecutive month, down -21.7 per cent.

Confusion surrounding air quality plans has inevitably led to a drop in consumer and business demand for diesel vehicles, which is undermining the roll out of the latest low emissions models and thwarting the ambitions of both industry and government to meet challenging CO2 targets. Indeed, if new diesel registrations continue on this negative trend, UK average new car CO2 levels could actually rise this year, the first time such an increase would have occurred since average CO2 emissions were recorded. So far this year 485,067 diesel vehicles have been produced in the UK, and maintaining strong demand for the latest new diesel vehicles is essential for the health of the UK automotive sector that employs over 814,000 people.

Year-to-date, new car registrations have fallen -3.9 per cent. But, overall, the market remains at a historically high levels with over 2 million vehicles hitting UK roads so far this year.

Mike Hawes, SMMT chief executive, said, “September is always a barometer of the health of the UK new car market so this decline will cause considerable concern. Business and political uncertainty is reducing buyer confidence, with consumers and businesses more likely to delay big ticket purchases. The confusion surrounding air quality plans has not helped, but consumers should be reassured that all the new diesel and petrol models on the market will not face any bans or additional charges. Manufacturers’ scrappage schemes are proving popular and such schemes are to be encouraged given fleet renewal is the best way to address environmental issues in our towns and cities.”

NFDA comments on decline

Commenting on the latest SMMT’s registration figures Sue Robinson, director of the National Franchised Dealers Association (NFDA), said: “The new car market reached a total of over 2 million vehicles registered in the year to date and is now down by -3.9 per cent on last year, in line with forecasts. The figures are lower year on year as a result of the record September in 2016, however the new car market still remains at historically high levels.”

Robinson continued, “Consumers walking into the showroom need more clarity on issues such as diesel and air quality. We are working closely with car retailers to assist them in educating their customers.

“Consumers also need to feel confident in the economy when embarking on high value items such as motor vehicles.

“On a positive note, the used car market has shown incredible signs of resilience which can partly offset the current decline in new car sales.

“As we enter the final quarter of the year, we expect the UK new car market to continue to perform at these levels.”