According to new figures from the Society of Motor Manufacturers and Traders (SMMT), 21.8% fewer diesel cars were sold in 2019 compared to previous years. This is a continuation of the falling number of diesels sales, which saw a further 30% decline in 2018. While 2019 saw a modest growth in the demand for petrol cars, December 2019 still marked the 33rd month of diesels decreasing popularity causing concern.
SMMT blame this decline on the continued anti-diesel rhetoric and confusion over clean air zones, which has caused many drivers to keep driving their older, more polluting vehicles for longer rather than purchasing newer models.
This concern is not limited solely to diesel cars. Overall the UK new car market has been in a downward spiral for the third consecutive year, with a 2.4% decline in sales and only 2,311,140 units being registered in 2019. For the world of fleets, the market share has remained static at 55.9%, with 1,292,882 new cars registered to fleet and business in 2019.
SMMT Chief Executive Mike Hawes has attributed the general decline to: ‘“Political and economic uncertainty, and confusing messages on clean air zones” which he says: “have taken their toll on buyer confidence”.
However, despite this overall decline, the UK car market remains one of the largest in the EU, second only to Germany. An alternatively fuelled vehicle (AFV) registrations surged in 2019, taking a record 7.4% market share and nearly 90 new generation models, including 23 zero emission cars and 11 plug-in hybrids, are set to make their showroom debuts in 2020. It is hoped that this new diversity, combined with compelling offers, will increase consumer confidence and with this, sales.
Justin Benson, Head of Automotive at KPMG in the UK, said: “The latest car registration numbers are disappointing, having dropped by over 2% on the previous year, however, the focus this year is all about consumer confidence and electric vehicles.
“Over the next couple of months, we will see if consumer confidence improves, with increased certainty around the economy. I believe that 2020 will also be the year the industry sees sales of electric vehicles double again.
“Although still a low base, new emissions regulations and increased consumer awareness around climate change will drive continued growth in battery electric vehicles.”
Despite this optimism, according to the forecast by GlobalData, the UK’s new car market is set to see another 5% drop in 2020. David Leggett, Automotive Editor at GlobalData responded: "The UK's planned formal departure from the EU at the end of January and the transition arrangements for UK-EU trade (effectively, business as usual) may have removed some short-term uncertainty, but the UK Government is aiming to conclude a new trade deal with the EU by the end of the year.”
The difficulty in securing a comprehensive UK- EU trade deal by the end of the year may mean that new import tariffs on car parts and vehicles come into play, the impact of which Leggett states as “Once again, investment flows to UK Automotive could seize up and consumers will be nervous about economic prospects.”
Brexit uncertainty, combined with current currency volatilities suggest that the UK car market will struggle to pick up against the current economic background, meaning we could be seeing more sales decline over the coming months.