UK registrations suffer poor start to the year

5 February 2020

The UK’s new-car market has not had the best start to the year, with the lowest January sales figures since 2013.

New figures from the Society of Motor Manufacturers and Traders (SMMT) show the market declined 7.3% in the first month of 2020, with just 149,279 sales. Continuing confusion surrounding diesel and clean-air zones, as well as ongoing weak consumer and business confidence, drove the poor performance.

Dropping figures

Registrations from private buyers declined 13.9%, while fleet purchases also fell, but by just 2.2%. Registrations of diesel cars fell for the 34th month in succession, dropping 36% in January to record the weakest performance by the market since 2000, with just a 19.8% share of sales. Petrol demand dropped 9.5% in the month.

Alternatively-fuelled cars, however, continued to grow in popularity. Hybrid cars increased by 20.6%, with 8,941 hitting British roads, and plug-in hybrids (PHEVs) demand more than doubled, up 111.1% to 4,788 units, despite the removal of grants to aid their purchase last year. Electric-vehicle (EV) registrations, meanwhile, continued to surge, up 203.9% to 4,054 units and a 2.7% market share. Combined, alternatively-fuelled vehicle registrations reached 11.9% of the market in January – the highest on record, up from 6.8% in the same month last year.

Ban looming

The figures come a day after the government announced its ambition to end the sale of all vehicles with an internal-combustion engine, including hybrids and PHEVs, by 2035. Hybrids and plug-in hybrids are zero-emission capable, bringing significant environmental benefits today and are an important stepping-stone in helping motorists make the switch to a zero-emission vehicle, the SMMT says. These vehicles, alongside the latest low-emission petrol and diesel models, have a vital role to play in the transition to zero-emission transport and an outright ban will hamper innovation and hold back progress.

The industry body is also calling for an extensive package of government support, to ensure the UK market can stand any chance of meeting the extremely challenging 2035 goal. It believes these measures must support a smooth and sustainable transition for industry and consumers, whatever their income or driving needs.

There is also a call for the government to have a long-term commitment to the plug-in car grant – which is currently set to expire in March – and that it should be extended to cover all lltra-low emission vehicles, whether PHEV, full battery-electric or hydrogen-fuelled vehicles. The clear evidence from other European markets of the negative consequences of removing incentives before the market is ready should be a key consideration.

Confusion rife

′The new-car market is a key driver of the UK’s overall economy, so another month of decline is unsettling, adds SMMT chief executive Mike Hawes. ′Consumer confidence is not returning to the market and will not be helped by the government’s decision to add further confusion and instability by moving the goalposts on the end of the sale of internal combustion engine cars.

′While ambition is understandable, as we must address climate change and air quality concerns, blanket bans do not help short-term consumer confidence. To be successful, the government must lead the transition with an extensive and appropriately-funded package of fiscal incentives, policies and investment to drive demand. We want to deliver air-quality and environmental improvements now but need a strong market to do so.’