New car market down in 2018, but new model blitz planned for 2019

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Author: | Updated: 07 Jan 2019 11:00

New car registrations fell for a second consecutive year in 2018, with a 5.5% year-on-year drop in December capping a turbulent year for the industry.

A number of factors have affected business and consumer confidence, with Brexit implications, a downturn in diesel’s popularity and newly introduced emissions regulations all having an effect.

2.37 million new cars were registered in 2018, according to the Society for Motor Manufacturers and Traders (SMMT), a 6.8% year-on-year drop that leaves registrations around 12% lower than their peak of 2.69 million in 2016.

new_car_registrations

New diesel registrations fell 31% year-on-year in 2018, and have seen a successive decline for 21 months.

The downward turn in diesel numbers has also had a knock-on effect for average CO2 emissions, which rose by 3% last year to 124.5g/km. Diesels generally produce less CO2 than petrol models, although they produce higher levels of NOx.

Annual-registrations-2001-to-2018

Growth in registrations of petrol (+8.7%) and alternatively fuelled vehicles (+20.9%) replaced some of the loss but not enough to offset the full shortfall as many diesel owners adopt a ‘wait and see’ approach, keeping hold of their older, more polluting vehicles for longer.

Private, fleet and business registrations all fell in 2018, with the biggest losses felt in the fleet sector (down -7.3%), while private motorists and smaller business operators registered -6.4% and -5.6% fewer new cars respectively.

December-2018-and-YTD-cars

Mike Hawes, SMMT chief executive, said: “A second year of substantial decline is a major concern, as falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market.

“The industry is facing ever-tougher environmental targets against a backdrop of political and economic uncertainty that is weakening demand so these figures should act as a wake-up call for policy makers.”

The SMMT has previously pointed to discrepancies between the government’s Road to Zero strategy, and criticised chancellor Philip Hammond’s decision to cut grants for plug-in hybrid vehicles. It has also been critical of the government’s handling of Brexit negotiations, urging Theresa May to rule out a ‘No Deal’ scenario and highlighting the importance of frictionless trade.

As for the cars themselves, the ever-popular Ford Fiesta topped the 2018 charts, with the next closest contender – the Volkswagen Golf – more than 30,000 units behind. The all-new A-Class continued to perform well in December, with more than 43,000 registered throughout 2018.

December-2018-best-sellers_cars

Hawes commented: “Despite the overall decline in 2018, demand for new cars in the UK remains solid, with volumes on a par with the preceding 15-year average, and the market still the second biggest in the EU, behind Germany. It is also one of the most diverse, with buyers able to choose from some 350 different models available in fuel types and body styles to suit all driving needs.

“Meanwhile, more than 80 exciting new generation models – 31 of them plug-in electrics – are set to make their showroom debuts in 2019, and with some compelling deals on offer, the industry is continuing to invest to grow the market despite the headwinds.”

Read more SMMT and industry news here

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