2018 saw the new car market suffer its worst performance in five years as fleet sales fell by more than 7%. According to the Society of Motor Manufacturers and Trader’s figures (SMMT), only 2.63million cars were registered in 2018, which is 12% below 2016’s peak and 6.8% below 2017’s.

The SMMT predict a further 2% drop in registrations for 2019,but the Brexit outcome will likely affect the driver to market performance for the year.

Expanding on the findings, Chief Executive of the SMMT, Mike Hawes, explained:

“A 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 weakeningdemand, so these figures should act as a wake-up call for policy makers.”

Despite the ‘turbulence’, Hawes added that the performance was mostly in line with projections and “probably in line with the average forthe past 10 years.”

As well as Brexit, Hawes said the decline was the result of factors that include the Worldwide Harmonised Light Vehicles Test Procedure (WLTP)and the continued uncertainty over diesel.

The SMMT have made it clear that they believe a ‘no deal’ Brexit to be a negative result and they want to work towards a degree of continuity: “Frictionless trade is what this industry depends on,” stated Hawes. “Tariffs will push up the price of vehicles.”

“The chancellor has spoken of a boost to the economy if adeal goes through. Without a deal it could be a different situation,” he added.

The Brexit vote could also impact electric vehicle (EV)registrations. However, it is not yet known how UK sales will contribute to manufacturer’s individual CO2 targets. Should the sales not count towards targets, Hawes expressed concern that manufacturers would be less likely to allocate big amounts of EV stock to the UK.

The diesel sector displayed the largest volume drop (a 29.6%drop for 2018), equivalent to 180% of the overall market’s decline. Diesel vehicles are 15-20% more efficient than petrol equivalents on average, which the SMMT believes makes them a key part of addressing climate change.

The figures also show that despite huge investment to deliver more efficient cars, the new car fleet average CO2 rose by 2.9% to 124.5g/km. The average new or updated model now emits -8.3% CO2 than it replaced.

Hawes believes that consumers could switch to buying diesel vehicles as petrol becomes less efficient. Plus, there’s the fiscal incentive from the introduction of Real Driving Emissions Step 2 (RDE2) standards. He explained: “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.”