September figures show sixth month of sales decline for UK market
05 October 2017
05 October 2017
The UK vehicle sales market decline shows no sign of slowing down, with new figures showing a 9.3% drop in sales during the month of September.
The new figures highlight a sixth consecutive month of decline in the UK, with figures falling since April due to a mixture of new vehicle excise duty (VED) rates coming into force and concerns surrounding the Brexit progress. Registrations were predicted to pick up in September, the month the country releases new vehicle registrations and following the launch of a number of manufacturer-backed scrappage schemes in the month.
The Society of Motor Manufacturers and Traders (SMMT) figures show demand from business customers fell by 5.1%, with fleet sales falling 10.1% and private sales dropping 8.8% compared to the same period in 2016. In total, 426,170 units were registered, down from 469,696 in September last year.
For fuel types, petrol powered vehicles continued their market share dominance with a sales drop of just 1.2% in the month and a market share of 54.6%. However, diesel continued its dramatic decline with a drop of 21.7% over the same period, with a 40.1% market share. Alternatively fuelled vehicles (AFVs), which include hybrid, plug-in hybrid and electric vehicles (EVs) grew by 41%, taking a market share of 5.3% for the month.
Mike Hawes, SMMT chief executive, comments: ′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.’
Year-to-date, new car registrations have fallen by 3.9%, with petrol sales increasing 3% and AFV rising 34.6%, while diesel sales have fallen by 13.7%, occupying a market share of 42.8%, down 4.8% compared to the first nine months of 2016.
Confusion surrounding air quality plans has inevitably led to a drop in consumer and business demand for diesel vehicles, which the SMMT believes 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. If new diesel registrations continue on this negative trend, the body believes UK average new car CO2 levels could rise this year, the first time such an increase would have occurred since average CO2 emissions were recorded. This is worrying for manufacturers, who are facing large fines for potentially missing CO2 targets in Europe by 2021.
The September figures were expected to offer better news for the UK sales industry following the introduction of a number of scrappage schemes by manufacturers to get older and more polluting vehicles off roads, with financial incentives for drivers to buy a new vehicle. However, without pre-registrations, any sales through these schemes could be shown in October figures, with vehicle registrations taking around four weeks on average and schemes only starting on 1 September.
The UK is the only country in Europe’s big five, which includes Germany, France, Spain and Italy, to be struggling with sales. Recent figures show growth in Italy of 8% in September, with Spain reporting growth of 4.6% thanks to fleet buyers and Germany seeing a sales drop of 3%, although overall the market is up by 2.9%. Overall, ACEA figures released showing August sales highlighted growth of 5.6% across the continent.