Brexit and falling consumer confidence hit UK new car sales market

UK car manufacturing is down almost 10 per cent amid Brexit fears

Sales of new cars in the UK declined for the second year in a row in 2018 against a backdrop of political uncertainty.

According to the figures released by the Society of Motor Manufacturers and Traders (SMMT) annual registrations fell to 2,367,147 units which is a decline of 6.8% on the figures from 2017.

Private, fleet and business registrations were all down in 2018, with the biggest losses felt in the fleet sector which was 7.3% while private motorists and smaller business operators registered 6.4% and 5.6% fewer new cars.

But it was diesel vehicles where the biggest hit came with sales figures down almost 30 % in 2018. The SMMT said December was the 21st consecutive month of decline for the fuel type vehicles.

While this decline is another warning shot for the automotive industry, which has many manufacturing plants across the region, the SMMT said it is also a time of great investment in the growth and innovation in the sector.

There was an almost nine per cent growth in petrol vehicles and more than 20% increase in alternative fuel vehicles. Petrol electric hybrids remained the most popular choice, up 21.3% to 81,156 units with plug-in hybrids (PHEVs) also recording an uplift of almost 25% over the year.

Pure electric cars, meanwhile, grew 13.8% in the year but, with just 15,474 registered, they still make up only 0.7% of the market.

Mike Hawes, SMMT Chief Executive, said: 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 weakening demand so these figures should act as a wake-up call for policy makers.

“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 UK remains solid, with volumes on a par with the preceding 15-year average,3 and the market still the second biggest in the EU, behind Germany. It is also one of the most diverse, with buyers able to choose from some 350 different models available in fuel types and body styles to suit all driving needs.

“Meanwhile, more than 80 exciting new generation models – 31 of them plug-in electrics – are set to make their showroom debuts in 2019, and with some compelling deals on offer, the industry is continuing to invest to grow the market despite the headwinds.”

The West Midlands, Oxfordshire and Wiltshire all a have proud car manufacturing heritage with big names such as BMW Mini, Jaguar LandRover and Honda all having major plants based in the area.

Despite the rather gloomy picture in UK car sales, it is not all bad news for one manufacturer in the region. Jaguar Land Rover has reported an all-time record sales year for its combined brands in America in 2018.  Its US sales reached 122,626 units – up seven per cent compared to the previous record set in 2017 of 114,333 vehicles.

Joe Eberhardt, President and Chief Executive, Jaguar Land Rover North America, LLC said: “We are pleased to finish another year with record-setting sales for Jaguar Land Rover in the U.S.

“Land Rover continues to prove its reign in the luxury SUV market by achieving its fourth consecutive record-setting sales year on the heels of announcing the highly anticipated return of the iconic Defender to the US market. This success is truly a testament to the strength of our product line-up and the dedication of our retailer network.”

According to the SMMT, these were the 10 best selling cars of 2018

Ford Fiesta 95,892

Volkswagen Golf 64,829

Vauxhall Corsa 52,915

Nissan Qashqai 50,546

Ford Focus 50,492

Volkswagen Polo 45,149

MINI 44,904

Mercedes -Benz A Class 43,527

Ford Kuga 40,398

Kia Sportage 35,567