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Brexit deal ‘critical’ to stimulate new car demand as registrations continue to fall

Brexit deal ‘critical’ to stimulate new car demand as registrations continue to fall

A Brexit deal was critical to secure business and consumer confidence and provide a stimulus to new car registrations in the New Year, said the Society of Motor Manufacturers and Traders (SMMT) as it revealed “a modest” 3% fall in volumes in November.

New car registrations last month totalled 158,639 (November 2017: 163,541) taking this year’s volumes to 2,223,058, 6.9% down on last year’s 11-month total (2,388,144).

The SMMT said that stalling consumer confidence, supply delays due to implementation of the new Worldwide harmonised Light vehicles Test Procedure (WLTP) emissions test and model replacement all combined to affect overall sales. However, the organisation said that with more than 2.2 million new cars registered in 2018 demand was “in line with expectations given challenging conditions”.

Fleet registrations slipped 0.7% last month to 84,431 (November 2017: 85,010) and private demand fell 6.4% to 69,355 (November 2017: 74,063). However, business sector demand bucked the downward trend rising 8.6% to 4,853 (November 2017: 4,468). During the month growth for petrol (+3.5%) and alternatively fuelled vehicles (+24.6%) failed to offset further fall in diesel demand (-16.7%).

In 2018, fleet registrations are 7.3% down at 1,138,976 (2017: 1,228,976), business sector demand is down 6.3% at 86,419 (2017: 92,225) and private volume is down 6.5% at 997,663 (2017: 1,066,943). Registrations of new diesel cars are 29.8% down during the year.

SMMT chief executive Mike Hawes said: “Model and regulatory changes combined with falling consumer confidence conspired to affect supply and demand in November. The good news is that, as supply constraints ease, and new exciting models come on sale in the months ahead, buyers can look forward to a wide choice of cutting-edge petrol, diesel and electrified cars. It’s now critical that a Brexit deal is secured to boost consumer confidence and provide a stimulus to the new car market as we enter the New Year.”

Ashley Barnett, head of consultancy at Lex Autolease, the UK’s largest vehicle leasing and contract hire company, said: “This has been a challenging year for fleets, with changes to emissions testing and tax regulations making it difficult to plan for the future.

“As well as a decline year-on-year, it is no surprise to see registrations are down compared with this time four years ago. Based on the average 48-month fleet replacement cycle, this indicates that drivers who renewed in Q2 2014 are choosing not to now. Whether they are moving away from company cars into ‘grey fleet’ or holding on to older vehicles for longer, progress towards the [government’s] Road to Zero targets will be slowed as a result.

“Looking ahead to next year, increased clarity on company car taxation due in the spring should give drivers and fleet decision-makers the confidence to start placing orders again.

“We also expect to see the government’s focus on sustainability to gather pace and we hope that as part of this, mobility as a whole will be reviewed. Fleets have always been the pioneers of new vehicle technology and have an important role to play in reducing emissions, but it is important to look beyond the circa. one million company cars on the roads and drive behavioural change across the board.”

  • The new light commercial vehicle market grew 9.6% in November, as 29,035 vans and pick-ups joined UK roads, according to the latest figures released by the SMMT. The increase represented 2,549 more pick-ups and vans registered in the month compared to November 2017. Throughout 2018 the market has seen the number of new registrations fluctuate with fleet buying cycles and business uncertainty. Demand for new LCVs is broadly stable year-to-date, down 0.7% compared with the same period last year, with 331,776 new vans and pick-ups registered in the UK - 2,357 fewer than the first 11 months of 2017. Mike Hawes, SMMT chief executive, said: “The rise in demand for new high-tech, low emission vehicles in November is certainly good news. However, overall, the LCV market has been affected by weaker business confidence caused by economic uncertainty, reflected in fluctuating demand throughout the year. Operators need stability to invest and renew their fleets, which now depends on government providing the right conditions.”