UK registrations drop in June as market continues to stabilise

5 June 2018

The UK’s new vehicle registration numbers have declined in June, following two months of growth in the country.

According to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT), June saw 234,945 new vehicles registered, down 3.5% compared to the same month last year. The drop is modest and expected as the market in the UK continues to stabilise following a twelve month period of decline.

Much of the decline can be laid at the door of the diesel market. In June, sales of vehicles powered by the technology dropped 28.1%, with just 74,361 units sold for a market share of 31.7% in the month. In comparison, petrol vehicle sales grew 12.3% with a total of 145,035, while alternatively fuelled vehicles, including battery electric, hybrid and plug-in hybrid, rose by 45%, although totalling just 15,549 sales.

The SMMT believes that the decline of the diesel market is in part to an unclear strategy on behalf of the UK Government. SMMT chief executive Mike Hawes comments: ′Despite a rocky first six months for the new car market, it’s great to see demand for alternatively fuelled vehicles continue to rise. Given these cars still, represent only one in 20 registrations. However, they cannot yet have the impact in driving down overall emissions that conventional vehicles, including diesels, continue to deliver. Recent government statements acknowledging the importance of petrol and diesel are encouraging. However, we now need a strategy that supports industry investment into next-generation technologies and puts motorists back in the driving seat, encouraged to buy the car that best suits their needs, whatever its fuel type.’

Speaking to Autovista Group in June, Hawes said: ′What we are looking for from the government is a much clearer statement that for many people, it is still the right choice. Sure, if you live in the centre of a city and drive only a few miles, diesel is never the right option, but if you live in suburban or rural areas or drive high mileage, then from both environmental and household income terms, owning one still makes sense.’

Demand from larger fleets fell 6.4%, but business buyers with fewer than 25 vehicles on their books returned to showrooms, registering an 11.3% uplift in demand after an 11-month long hiatus. Private demand was largely flat, at a drop of 0.6%.

Smaller cars remained most popular, with Supermini and Lower Medium vehicles taking a combined 57.4% market share. However, Dual Purpose was the fastest growing segment, with demand up by some 16.4%, 6,710 more than in the same month last year. Dual Purpose, Executive (4.3%) and Luxury Saloon (1.3%) were the only segments to register growth in June.

June capped off a turbulent first half of the year, distorted by the previous year’s vehicle excise duty (VED) hikes, with the market experiencing a severe double-digit decline in March 2018 followed by a stronger April and May, when year on year demand grew. Year-to-date, overall demand remains down, by some 6.3% to 1,313,994 units. Diesel sales are down by 30.2%, while petrol is up 11.4% and AFVs up 24.2%.