The UK’s new car market declined again in October as the market shows some signs of recovery following the introduction of WLTP.
According to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT), registrations in October fell by 2.9% with 153,599 vehicles sold. With various carmakers still struggling with model shortages due to the new emissions test regime, the figures suggest the spike in August and decline in September are helping to balance the market out.
Declines were seen in both private and fleet sectors, with registrations down 1% and 5.2% respectively. Meanwhile, continuing uncertainty over government policy on diesel saw demand fall by a further 21.3%. Registrations of petrol cars rose 7.1%, while the market for alternatively fuelled vehicles (AFVs) once again showed strong growth, up 30.7%, supported by new models.
Zero-emission battery electric vehicles saw growth of 86.9%, although this equates to only 584 extra sales compared to last year. Hybrid and plug-in hybrid vehicles, which make up the majority of AFV sales due to their greater flexibility, also enjoyed strong uplifts, growing 31% and 19.1% respectively. However, the high growth in battery vehicles is not surprising given the announcement that the Plug-in Car Grant was to be cut for pure electric cars and withdrawn completely for plug-in hybrids – although, due to lead times, the full impact may not be seen for several months.
The figures come as SMMT publishes new industry forecasts for AFV demand, with registrations expected to grow 82.5% from 2017 levels by 2020. Similar growth (88.3%) is projected for plug-in electric cars, with 92,620 new plug-in hybrid and battery electric cars expected to be sold in the same year, taking market share to around 4%. This is at the lower end of government’s 3% to 7% stated ambition, with cuts to the Grant further undermining industry’s ability to deliver this ambition.
In the first ten months of the year, the overall car sector remains down by 7.2% on the same period in 2017. More than two million cars have been registered so far, and the SMMT believes that should there be no further market disruption, some pull-back is hoped for in the last two months of 2018. Current supply issues are expected to ease towards the end of the year, allowing manufacturers to catch up on sales.
Mike Hawes, SMMT Chief Executive, comments: “VED upheaval, regulatory changes and confusion over diesel have all made their mark on the market this year, so it’s good to see plug-in registrations buck the trend. Demand is still far from the levels needed to offset losses elsewhere, however, and is making government’s decision to remove purchase incentives even more baffling.
“We’ve always said that world-class ambitions require world-class incentives and, even before the cuts to the grant, those ambitions were challenging. We need policies that encourage rather than confuse. Government’s forthcoming review of WLTP’s impact on taxation must ensure that buyers of the latest, cleanest cars are not unfairly penalised else we will see older, more polluting cars remain on the road for longer.”