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New car sales crash and burn

Patrick Kiely
Jan 6, 2020


People just aren't getting revved up for new cars anymore, figures show.

New car sales sunk to a six-year low in 2019 due to low consumer confidence and a 22 per cent decline in demand for diesel vehicles, the automotive industry confirmed this morning.

Figures released by industry body the Society of Motor Manufacturers (and seen by The Daily Mail) and Traders show 2.31million new cars were registered in the UK in 2019, down 2.4 per cent on the previous 12 months.

It is the third consecutive year of decline and is the lowest annual total since 2013.

Decline in demand for diesel cars has meant average carbon emissions of new cars has risen, despite big increases in sales of alternative fuel models, mainly pure electric vehicles. 

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Records show that 2,311,140 new cars were registered in 2019, down from 2,367,147 the year previous.

This was a year-on-year decline of 2.4 per cent, down 5.7 per cent on 2017 figures and behind by 14.2 per cent of the record high vehicle sales recorded in 2016.

Much of this was due to a 22 per cent fall in diesel registrations.

Before the demise of diesel, triggered by the Volkswagen emission cheating scandal in 2015, oil burners made up 50 per cent of all new vehicle sales. In 2018, diesels had a market share of almost a third.

But last year, diesel contributed to just a quarter of all registrations, showing the marked dip in demand.  

This drop in volume of diesel sales has not only strangled the industry but had a negative impact on the environment.

The shift away from diesel to petrol alternatives has sparked a rise in the average carbon dioxide emissions of new cars, despite manufacturers facing strict targets for the outputs of their latest vehicles across the range.

The average amount emitted by new cars in the UK in 2019 rose by around 2.7 per cent, the SMMT predicted.

Chief executive Mike Hawes told reporters that 2019 was 'a turbulent 12 months' and described the fall in sales as 'a major challenge'. 

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He said: 'A third year of decline for the UK new car market is a significant concern for industry and the wider economy. 

'Political and economic uncertainty, and confusing messages on clean air zones have taken their toll on buyer confidence, with demand for new cars at a six-year low.' 

Bristol City Council, for example, is bidding to ban privately-owned diesel cars from part of the city at certain times – a much more stringent proposal than other areas, including the capital's Ultra Low Emission Zone.

The potential for a 'patchwork of different standards' across the country means many people are 'keeping hold of their older cars for longer', Mr Hawes warned.

And he suggested that the same issues would continue into 2020, predicting a further drop in demand this year of 1.6 per cent.

'A stalling market will hinder industry’s ability to meet stringent new CO2 targets and, importantly, undermine wider environmental goals,' he went on. 

'We urgently need more supportive policies: investment in infrastructure; broader measures to encourage uptake of the latest, low and zero emission cars; and long term purchase incentives to put the UK at the forefront of this technological shift. 

'Industry is playing its part with a raft of exciting new models in 2020 and compelling offers but consumers will only respond if economic confidence is strong and the technology affordable.' 

Alex Buttle, director, car selling comparison website Motorway.co.uk, described 2019 as 'one of the car industry's gloomiest on record', with political and economic instability 'sucking all optimism out of the market', but said demand had improved following the decisive December General Election result.

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'There's still a huge dark cloud hanging over us with no EU trade deal on the table, but if consumers needed certainty to start buying again, they received it in the form of a majority Conservative government,' he told This is Money. 

'Leaving the EU on 31st January may stall a recovery in car sales in the short term, although early signs are encouraging. We are already seeing more activity in the used vehicle market, with a strong December in terms of people looking to sell their cars. 

'But at the very least, we now have a government that can make decisive decisions and the first should be agreeing a positive future relationship with the EU for our auto industry, which avoids punitive tariffs and barriers that could lead to higher prices and less retail choice.' 

Record market share for alternative fuel vehicles as pure electric demand overtakes plug-in hybrids

While registrations were down by 2.4 per cent for the full year, December 2019 sales had actually increased.

Year-on-year registrations were up by 3.4 per cent in the last month of the year, with almost 149,000 new models entering the road network in December.

However, this rise did little to claw back the huge ground lost earlier in the year, with registrations down for most of 2019. 

Private sales of new cars were down 3.2 per cent for the whole year, while fleet demand was up 0.8 per cent.

The one small success story in the data was the rise in demand for hybrid and electric cars. 

Demand for alternatively-fuelled vehicles was up 20.6 per cent, taking a record market share of 7.4 per cent.

This includes the sale of around 38,000 pure electric cars, which overtook plug-in hybrids in popularity for the first time, following changes to Government grants for low-emission cars in October 2018.

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