Axon’s Automotive Anorak: The ups and downs of the UK new car market

Up to the end of July 2019, for example, new car registrations (the measure of sales) have been in overall decline for five consecutive months, largely due to the double whammy of political and economic uncertainty, mixed in with the cocktail of real confusion over future Government policy on different vehicle fuel types. These key factors are continuing to knock would-be new car buyer confidence, especially in the important business sectors.

The UK new car market declined again in July, with 157,198 new vehicles leaving showrooms, according to the most recent figures released by the Society of Motor Manufacturers and Traders (SMMT). Registrations fell by -4.1 per cent, with declines seen across all retail sectors. Private demand dropped by a surprisingly low -2.0 per cent, while deliveries for fleet and business customers were down -4.7 per cent and a more troubling -22.5 per cent respectively (and down 38 per cent year-to-date!).

Luxury saloons and specialist sports cars both experienced a marginal rise in registrations in the month of July, with volumes driven by increased demand for dual purpose SUV and crossover vehicles, up 12.8 per cent, to take nearly a quarter (24.4 per cent) of the total British new car market. All other segments experienced declines in July, with the biggest falls seen in the executive (-21.6 per cent for cars like the BMW 3 Series) and supermini (-12.1 per cent for cars like the Ford Fiesta) segments.

Registrations of new diesel vehicles in July fell for the 28^th month in a row, down -22.1 per cent, while petrol passenger cars remained stable with a small 2.6 per cent increase, resulting in 2,646 more registrations than in July 2018.

Hybrid cars increased by a substantial 34.2 per cent, though, with 7,758 of these low-emission vehicles joining UK roads. Meanwhile, plug-in hybrid electric vehicles continued their recent decline, down -49.6 per cent due to major changes in the Government’s PHEV taxation incentives.

The most encouraging news is that demand for battery electric vehicles tripled, shooting-up by a massive 158.1 per cent, resulting in an overall 1.4 per cent market share, the highest-ever UK monthly market share on record for electric passenger cars. Vehicle manufacturers have invested heavily in a growing range of powertrain options, with British drivers now having the choice of advanced low emission petrol and diesel-powered cars, and an ever-greater number of hybrid, plug-in hybrid, battery electric and even hydrogen cars. There are currently more than 350 models available in the UK new car market – around 80 of them alternatively fuelled, including 21 battery electric models, with more due to arrive in showrooms later this year.

The SMMT forecasts this ongoing investment into new, ever more advanced powertrain technology will result in battery electric vehicles doubling their British market share next year, with 51,000 registrations forecast for 2020. However, this will still represent only 2.2 per cent of the overall market. If Britain is to meet its zero emission ambitions, the UK will still need world-class, long-term incentives, supportive policies and substantial investment in infrastructure, and the Government will need to create the right conditions to implement these, sooner rather than later.

In terms of the UK’s top ten best-selling new cars, Ford continues its fine start to 2019 with three models placed within the top ten. Despite an overall 12 per cent drop in UK supermini sales, Ford’s Fiesta remains the most popular car in the country, as it has done for some time now, with 5,646 registrations in July (48,943 in total year-to-date, or YTD), over 1,000 more than its nearest rival.

The perennial soon-to-be-replaced Volkswagen Golf took second place in July on with 4,288 registrations (35,781 YTD), while the Ford Focus was knocked down into fourth place with 3,863 registrations, although it still remains the second best-selling placed car of the year so far with 36,102 sales YTD. In third place for July was the crossover Nissan Qashqai with 4,047 registrations (33,227 YTD).

For the UK’s remaining top ten best-selling passenger cars YTD, the run out-Vauxhall Corsa is in fifth position with 33,061 sales, a hefty 15,000 units behind the Ford Fiesta, with the Mercedes-Benz A-Class being the UK’s top ‘premium-badged’ seller in sixth place at 31,606 sales. The VW Polo takes seventh position YTD with 26,173 examples finding new buyers, followed by Ford’s third entry, the popular Kuga SUV, in eighth place overall YTD at 23,346 units. The Mini hatch range takes ninth place (23,001 examples YTD) and the Kia Sportage slots in at tenth place (21,194 units YTD).

A spate of important new market arrivals over the coming weeks and months – including the brand-new Vauxhall Corsa, Peugeot 208, BMW 1 Series and VW Golf – should help to give British new car registrations a welcome boost, but until the Government sorts out some crucial policies on Brexit, new vehicle emissions, and so on, the market is liable to remain in a state of flux and decline. I mean, would you choose to buy a brand new car at the moment? No, nor me!