Emissions ‘upheaval’ blamed for falling new car registrations

The UK’s new car market declined by -6.8% in 2018, with new registrations falling for a second year to 2,367,147 units, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT).

They attributed the decline in consumer and business confidence to regulatory ‘upheaval’ surrounding emissions and ‘punitive’ measures against diesel vehicles.

The diesel sector saw the biggest decline, down -29.6% in 2018, with the volume loss equivalent to some 180% of the overall market’s decline.

Vehicles in the AFV sector fared better as petrol registrations grew by 8.7% and alternatively fuelled vehicles by 20.9%.

Petrol-electric hybrids remained the most popular choice, up +21.3% to 81,156 units. Plug-in hybrids (PHEVs) also recorded a strong number, +24.9%, over the year, though the SMMT says these figures suggest growth is slowing following the removal of the Government’s plug-in car grant for these vehicles in October.

Pure electric cars grew 13.8% in the year but, with just 15,474 registered, they still make up only 0.7% of the market, meaning the pace of growth of plug-in cars is now falling significantly behind the EU average.

Data published by the SMMT reveals the UK new car fleet average CO2 rose for a second successive year, by 2.9% to 124.5g/km, despite huge investment by manufacturers to deliver ever more efficient cars, with the average new or updated model emitting -8.3% less CO2 than that it replaced.

Mike Hawes, SMMT Chief Executive, said: A second year of substantial decline is a major concern, as falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market.

‘The industry is facing ever-tougher environmental targets against a backdrop of political and economic uncertainty that is weakening demand so these figures should act as a wake-up call for policy makers.

‘Supportive, not punitive measures are needed to grow sales, because replacing older cars with new technologies, whether diesel, petrol, hybrid or plug-in, is good for the environment, the consumer, the industry and the exchequer.’

An Auto Trader spokesperson blamed Brexit ‘anxieties’ on consumer confidence and urged the Government to avoid a no deal scenario.

‘A “no deal” will likely impact new car sales as poor exchange rates and potential tariffs could force brands to pass on the cost to consumers. However, a smooth Brexit resulting in stable exchange rates and trade agreements would signal to manufacturers that the UK remains a positive growth market with good profit opportunities, ensuring both a healthy pipeline of new stock and some great deals for consumers.’