The UK new car market declined by -4.6% in May with 183,724 units registered, according to the Society of Motor Manufacturers and Traders (SMMT). The industry’s governing body suggests that the fall reflects continued uncertainty over diesel and clean air zones, as well as the removal of incentives for plug-in hybrid vehicles. Meanwhile, the underlying economic and political instability continues to affect consumer and business confidence.
Declines were recorded across all sales types in the month, with registrations by private consumers, fleets and business buyers declining by -5.0%, -3.0% and -29.0% respectively. Most vehicle segments experienced a fall in demand, however, executive and dual-purpose vehicles bucked the trend, with registrations growing by 9.1% and 16.0% respectively. While demand for superminis and small family cars fell, these vehicles remain the most popular, taking a combined 56.3% of the market.
A modest growth in registrations of petrol (1.0%) and alternatively fuelled vehicles (11.7%) was not enough to offset the significant decline in demand for diesels, which fell for the 26th consecutive month. Ongoing anti-diesel sentiment and the forthcoming introduction of low emission zones continue to affect buyer confidence. However, thanks to significant industry investment in new technology, the latest diesels are proven to be safer and cleaner than ever before and will face neither charges nor restrictions anywhere in the UK.
Meanwhile, petrol-electric hybrids experienced increased demand, up 34.6% to 7,785 units, with battery-electric cars also recording a significant rise of 81.1%, although putting it into perspective, this segment still only represents 0.6% of the overall market. The various manufacturers ought to assume some responsibility for this tardy performance, as most of them operate long delivery delays, which they blame on ‘demand’, yet they seem unwilling to boost production to accommodate it. Of course, it does not help the situation that the other natural resources essential to perpetuating the EV sector, such as lithium and other precious materials, are said to be in ‘short supply’. Strangely, both Chinese and Russian governments have admitted to snaffling-up some of the latest locations for the yield of such products, thereby giving them a notional command of the market.
In other areas, plug-in hybrids have experienced another substantial decline, down -40.6% in May and -25.1% year-to-date. This compares with a 36.2% increase in the first five months of 2018 and is further evidence of the removal impact by government of the purchase incentive for PHEVs. While all such mobility grants need to be treated with a pinch of salt, our government’s action could be described as myopic at best.
Mike Hawes, SMMT Chief Executive, said, “Confusing policy messages and changes to incentives continue to affect consumer and business confidence, causing drivers to keep hold of their older, more polluting vehicles for longer. New cars are safer, cleaner and more advanced than ever and, with sophisticated safety, efficiency and comfort features, as well as a host of attractive deals on offer, there has never been a better time to invest in a new car.”