UK New Car Sales Fall At Fastest Rate In 2018 Since Global Financial Crisis

The UK new car registration declined at the fastest rate since the global economic crisis by 6.8 per cent in 2018, with annual registrations falling for a second year to 2,367,147 units, according to figures released on Monday (7) by the Society of Motor Manufacturers and Traders (SMMT).

A 5.5 per cent decline in December capped a turbulent year of model changes, regulatory upheaval and continued anti-diesel policies, adding to the ongoing decline in consumer and business confidence.

Private, fleet and business registrations all fell in 2018, with the biggest losses felt in the fleet sector (down 7.3 per cent), while private motorists and smaller business operators registered 6.4 per cent and 5.6 per cent a fewer new cars respectively.

Demand also fell across all vehicle segments bar the dual purpose category, which grew by 9.1 per cent to take a fifth of the market (21.2 per cent). Despite registrations of superminis and lower medium cars falling by 2.5 per cent and 9.4 per cent respectively, these smaller vehicles remain the most popular with a combined 58.7 per cent market share.

The biggest volume decline was seen in the diesel sector, down 29.6 per cent in 2018, with the volume loss equivalent to some 180 per cent of the overall market’s decline.

In the AFV sector, petrol-electric hybrids remained the most popular choice, up 21.3 per cent to 81,156 units. Plug-in hybrids (PHEVs) also recorded a strong uplift 24.9 per cent over the year, though the figures suggest growth is slowing following the removal of the government’s plug-in car grant for these vehicles in October.

“The 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 policymakers,” said Mike Hawes, SMMT Chief Executive.

“Despite the overall decline in 2018, demand for new cars in the UK remains solid, with volumes on a par with the preceding 15-year average, and the market still the second biggest in the EU, behind Germany.

“Meanwhile, more than 80 exciting new generation models- 31 of them plug-in electrics – are set to make their showroom debuts in 2019, and with some compelling deals on offer, the industry is continuing to invest to grow the market despite the headwinds,” Mike Hawes added.