UK new car market falls amidst car buyer 'confusion'.
Fri 27 April 2018
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The UK new car market declined in March, according to figures released by the Society of Motor Manufacturers and Traders (SMMT), with registrations falling -15.7% compared with the same month last year.
The SMMT say that economic and political uncertainty and confusion over air quality plans continued to affect confidence, resulting in declines across all sales types. Demand from business, fleet and private buyers all fell in March, down -14.3%, -15.0% and -16.5% respectively. Continuing the recent trend, diesel registrations declined, down -37.2%.
However, registrations of plug-in and hybrid vehicles continued to rise, albeit modestly, up 5.7%, with demand for plug-in hybrids driving growth, up 18.2% for the month. Registrations of petrol cars were essentially stable, up 0.5%.
RAC roads policy spokesman Nicholas Lyes said “The decline in demand for diesel cars continues to be of concern and the latest VED tax changes announced by the Government do nothing to encourage consumers to exchange their older diesel vehicles for new lower emission models.”
While declining diesel sales remain the main contributor to falling figures, the RAC has warned that “increasing confusion” over what kind of vehicle buyers should opt for next, is also impacting on sales, as well as hampering clean air schemes.
It says that while buyers are being encouraged to opt for greener ultra-low emissions vehicles, recent changes to Vehicle Excise Duty – which came into place in April 2017 and makes taxing the cars more expensive – appear to be putting buyers off new cars altogether.
Mr Lyes added “While drivers of electric vehicles benefit from paying no vehicle tax, those that opt for new ultra-low-emission vehicles now pay more after the first year than they did previously, which arguably doesn’t send the right message to prospective buyers looking to do the right thing. Indeed, after the first year, there is almost no car tax incentive to switch to any new vehicle with lower than average emissions.”
Meanwhile, the LowCVP has updated the fuel economy and emissions label that is displayed on every new car to include changes in VED bandings and other information. The changes, which are already in effect, include additional air quality information featured on the new car labels.
LowCVP’s Managing Director Andy Eastlake said: “At the moment, we know that car buyers are becoming confused and potentially overwhelmed by the new technologies and changes within the automotive industry and the policies across the country.
"Our focus is on providing the relevant information they need in an easily digestible format that enables them to choose the right low emission vehicle. This change to the ‘new car label’ is a small but important first part of this transition."
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