New car registrations forecast to decline further in 2018 and 2019
New car registrations are expected to fall in 2018 and
2019, according to the Society of Motor Manufacturers and Traders (SMMT)
following a 5.7% reduction in sales last year.
Declining business and consumer confidence was largely
blamed by the SMMT for the fall in registrations last year to 2,540,617 (2016:
2,692,786), although the market was still the third biggest in a decade.
December represented the ninth consecutive month of
decline, as registrations for the final month of the year dropped 14.4% to
152,473 (December 2016: 178,022).
The SMMT anticipates that new car registrations will fall
by around a further 5.4% in 2018 and then drop to below 2.4 million units next
year - some 300,000 or 11% below 2016’s record volume.
Private, fleet and business registrations were all down
in 2017, with demand from private motorists declining 6.8%
at 1,123,860 (2016: 1,206,250), while fleets saw a fall
of 4.5% to 1,319,193 (2016: 1,380,750) and business
registrations down 7.8% to 97,564 (2016: 105,786).
Last month new car registrations declined across
all three sectors: Fleet volume was down 11.7% to 90,217 (December 2016:
102,125); business sector registrations were down 35.3% at 5,339 (December
2016: 8,257) and private volume was down 15.9% to 56,917 (December 2016:
The SMMT also claimed that “confusing
anti-diesel messages” from the government had caused many to hesitate before
buying a new low emission diesel car and resulted in a 17.1% slump in sales in
Meanwhile, registrations of alternatively fuelled
vehicles accelerated 34.8% last year. The SMMT highlighted that a record number
of hybrid, plug-in hybrid, battery electric and hydrogen fuel cell cars were
registered - 119,821 models in total. However, while the result was the sector’s highest-ever
annual market share - 4.7% - it accounts for a tiny
fraction of the overall new car market. For example, alternatively fuelled
vehicle registrations in Norway last year accounted for more than 50% of total
new car registrations.
Poppy Welch, head of Go Ultra Low, the
collaborative motor manufacturers, SMMT and industry campaign group, said:
“2017 was a stellar year for electric vehicle registrations with strong growth
of 27%, demonstrating the massive consumer appetite for 100% electric and
plug-in hybrid cars.
“There are already more than 130,000 electric vehicles on UK roads, a
figure that could pass 190,000 this year as new models come to market and
consumers reap the cost saving benefits of electric driving.”
SMMT chief executive Mike Hawes said: “The decline in the
new car market is concerning but it’s important to remember demand remains at
historically high levels. More than 2.5 million people drove away in a new
car last year, benefitting from the latest, safest, cleanest and most fuel
“Falling business and consumer confidence is undoubtedly
taking a toll, however, and confusing anti-diesel messages have caused many to
hesitate before buying a new low emission diesel car. Keeping older vehicles on
the road will not only mean higher running costs but will hold back progress
towards our environmental goals. Consumers should be encouraged to buy the
right car for their lifestyle and driving needs irrespective of fuel type -
whether that be petrol, electric, hybrid or diesel as it could save them money.
“2017 has undoubtedly been a very volatile year and the
lacklustre economic growth means that we expect a further weakening in the
market for 2018.”
Ashley Barnett, head of consultancy at Lex Autolease, the
UK’s largest vehicle leasing company, said: “It’s not surprising to see a
continued fall in registrations, particularly in light of the publicity around
emissions, introduction of Clean Air Zones and changes to government policy
around the future taxation on company cars. Despite this, we experienced strong
growth within the SME market last year.
“We expect to see a decline in overall registrations in
2018 as consumers look for clarity around future economic plans and
environmental strategy. Despite the rise in average CO2 per new car last year,
we predict adoption levels of ultra-low emission vehicles (ULEVs) will rise in
the year ahead as consumers review fuel type in their vehicle choice.”
Matt Dyer, managing director of LeasePlan UK, said: “It would be
a mistake for the industry to fixate on the dip, because 2017 sales were still
amongst the highest on record. Having said that, ownership trends are changing
due to the gig economy and a host of other factors, most significantly the fact
that peoples’ attitudes towards ownership are shifting.
“Personal leasing is growing strongly, with the British
Vehicle Rental and Leasing Association reporting that personal contract hire
has risen 36% year-on-year. There’s a huge move toward drivers wanting a more
flexible approach, which ownership does not provide.
“The motor industry is vital to the UK economy, and as
the switch to electric vehicles gathers pace, I fully expect more people to
embrace the flexibility of leasing and start to move away from the more traditional
approach of ownership.”