Auto industry faces 'perfect storm' as sales drop

Irving Hamilton
January 9, 2019

However, hopes that hybrids, plug-in hybrids and pure battery-electric vehicles could begin to pick up the slack have come to nothing.

As part of a 6.8% fall in the overall market, the number of registrations to fleets was down 7.3%, compared with a 6.4% fall in private registrations. According to SMMT, anti-diesel rhetoric and negative fiscal measures took their toll, with figures for December 2018 (-26.3 per cent for diesel and -5.5 per cent overall) reflecting the overall drop off in this market segment.

The average amount emitted by new cars in the United Kingdom in 2018 rose by around 3% year-on-year. "The only slight positive to draw out of a year of lows was the growth in electric and hybrid vehicle sales, despite the government deciding to cut plug-in grants".

SMMT chief executive Mike Hawes described 2018 as "highly turbulent", but insisted sales were "on a par" with the average over the past 10 to 15 years. She went back to the data, nearly 30 per cent reflecting the development in other countries.

"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", Hawes added.

Superminis and lower medium cars fell by 2.5 per cent and 9.4 per cent respectively, but both vehicles remain the most popular with a combined 58.7 per cent market share.

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However, the move away from diesel cars contributed to a 3% rise in the average emissions of Carbon dioxide by new cars past year. "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".

"Despite the overall decline in 2018, demand for new cars in the United Kingdom remains solid, with volumes on a par with the preceding 15-year average, and the market still the second biggest in the European Union, behind Germany".

New vehicle sales in the United Kingdom fell in 2018 by their biggest rate since the global financial crisis a decade ago due to a weaker economy and a raft of regulatory changes, an industry lobby group said Monday.

"Rising residual values for electric vehicles will significantly help future new AFV sales in 2019 and beyond. But they can't do it all on their own - they need support from the Government to encourage more new vehicle purchases and allow the industry to thrive this year".

If the prediction holds true, vehicle sales this year would be about 12% below their 2016 peak when almost 2.7 million new cars were registered in the UK.

Looking at the overall new auto market, Ian Gilmartin, head of retail and wholesale at Barclays Corporate Banking, concluded: "It's not time to panic and worth remembering that in absolute terms sales are still way ahead of the nadir we hit at the start of the decade".

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