The UK new car market continued its decline in October, with registrations down 6.7% year-on-year.
This is according to the latest figures from the Society of Motor Manufacturers & Traders (SMMT), which attributed the decline to the tough environment for businesses and consumers find themselves in – with economic and political uncertainty impacting confidence.
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The decline was driven by falling demand from private consumers, with registrations down 13.2%. Business demand also fell, while fleet registrations remained stable at +0.3%. There was a mixed picture across body types, with the popular supermini segment experiencing a substantial decline (-23.4%), while dual purpose and small family car registrations grew 7.1% and 3.3% respectively.
Registrations of diesel cars fell for the 31st month, down 28.3%, while petrol also declined, by 3.2%.
Electrified cars continued to grow in popularity. Hybrid electric cars increased by a considerable 28.9%, with 7,950 leaving showrooms, as battery electric vehicle registrations almost tripled, up 151.8% to 3,162 units. Plug-in hybrids, however, fell just short of their positive performance in the same month last year, down 1.7%. Combined, alternatively fuelled vehicle registrations reached 9.9% market share in the month – the highest on record, up from 6.9% last year.
Year to date, the new car market remains in decline, down 2.9% on the first 10 months of 2018. The fall reflects continued uncertainty over diesel and clean air zones, stunted economic growth and uncertainty over Brexit, according to the SMMT.
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By GlobalDataMike Hawes, chief executive of the SMMT, said: “The growth in alternatively fuelled cars is very welcome, showing increasing buyer appetite for these new technologies. The overall market remains tough, however, with October now the year’s eighth month of decline and in need of an injection of confidence.
“Whether the general election delivers a ‘bounce’ to the economy remains to be seen, but with attractive deals and an ever-greater choice of low, ultra low and zero emission models arriving in the UK’s showrooms, consumers have every incentive to consider buying a new car.”
Industry reaction
James Fairclough, chief executive at AA Cars, said: “It is incredibly disappointing to see overall sales have gone into reverse between September and October, and to such a great extent.
“New car sales have been under pressure for much of 2019, and hopes had been high that September’s small jump in momentum, sparked by new registration plates, would mark a turning point. A 6.7% fall in sales is surprisingly sharp despite dealerships’ tireless efforts to attract buyers to forecourts.”
Michael Woodward, UK automotive lead at Deloitte, said: “Concerns about personal finances and a fall in consumer confidence in the third quarter mean many are shying away from major purchases. According to Deloitte’s latest Consumer Tracker data, just 4% plan on purchasing a vehicle in the next three months – the lowest level recorded in the Tracker’s nine-year history.
“The long-term decline in overall sales however, and the impact it is having on the residual values of stock, also means that dealers are becoming less inclined to pre-register cars. This has been an important driver of new car sales in the past, but exposes dealers to financial risks they are no longer willing or, in some cases, able to take.”
Sue Robinson, director of the NFDA, added: “It is encouraging to see demand for pure electric vehicles expand despite challenges. Not only electric vehicles but also the latest petrol and diesel cars are facing supply constraints which will improve as we approach 2020.
“Franchised retailers are making significant investments in their online strategy as well as their dealerships to ensure a platform for future growth and offset consumer uncertainty. We expect a relatively quiet last quarter of the year with a solid used car sector continuing to help counterbalance the decline in new car sales.”
