SMMT figures reveal seventh monthly decline in sales as UK market struggles

06 November 2017

The UK’s new vehicle registrations monthly decline continues, with the latest figures from the Society of Motor Manufacturers and Traders (SMMT) suggesting a 12% drop in sales during October 2017.

For the seventh consecutive month, sales in the UK dropped, although the 12.2% October decline represents the second biggest monthly drop of the year so far. Only 158,192 vehicles in total were registered, with diesel models suffering the most, while petrol saw a slight increase in sales, and the expanding alternative fuel vehicle (AFV) segment saw continuing rapid growth.

Decline was seen across the different market sectors, with business and fleet demand down 26.8% and 13.0% respectively. Meanwhile, dealers reported 10.1% fewer private buyers taking delivery of new cars in the month.

This comes despite manufacturers launching a number of incentive schemes to entice drivers into trading older and more polluting vehicles for new lower emission models. These were launched at the start of September, however with registrations taking a month on average to come into dealerships, it was expected that October’s figures would reflect the sales impact that extra deals have made.

With fleet and business sales down more than private vehicles, this could highlight a slight impact for the incentive movement. However, the decline in diesel sales and increase in AFV registrations could also be down to the ′demonisation’ of diesel in recent months, following the German diesel forum in August, and the announcement of an extra charge in more polluting vehicles in London – although this doesn’t apply to vehicles running Euro 5 and upwards technology.

In the month, diesel sales were down by 29.9% compared to October 2016, while petrol saw a light increase of 2.7%. AFVs grew their market by 36.9%, although this only represents an extra 2,223 sales in the month. In contrast, diesel saw 26,539 fewer sales. Overall, the market was 21,976 sales down.

Year-to-date, the overall automotive market is 4.6% down on 2016 levels, with 2,224,603 units registered. This aligns with the SMMT’s latest sales forecast for 2017, published last week, with the market expected to end the year on 2.565 million sales, a 4.7% drop on last year. Diesel is down by 14.9% year-to-date, while petrol is up by 2.9% and AFVs up 34.8%.

The figures suggest that it is the diesel market which is causing the declining numbers. The technology is down by 166,118 sales year-to-date while overall, the market is down 106,060 units. Petrol and AFVs, which include conventional hybrid, plug-in hybrid and pure electric vehicles, are slowly making up for diesel’s decline, which could be attributed in part to new vehicle excise duty figures introduced by the UK Government in April 2017, which is when the slide in figures began.

Mike Hawes, SMMT chief executive, said, ′Declining business and consumer confidence is undoubtedly affecting demand in the new car market but this is being compounded by confusion over government policy on diesel. Consumers need urgent reassurance that the latest, low emission diesel cars on sale will not face any bans, charges or other restrictions, anywhere in the UK. We urge the Government to use the forthcoming Autumn Budget to restore stability to the market, encouraging the purchase of the latest low emission vehicles as fleet renewal is the fastest and most effective way of addressing air quality concerns.’

The numbers could cause a decline in overall sales Europe-wide when the next set of figures are published by the European Automobile Manufacturers Association (ACEA). In its September results publication, the market was 2.2% down, thanks to a 9.3% decline in the UK market during that month.