New car registrations in UK fall to seven-year low

New figures out recently reveal Britons bought fewer new cars in 2019 than at any point since the post-recession low of 2013. According to the Society of Motor Manufacturers and Traders (SMMT), new car sales fell by -2.3% to 2.3 million units as buyers stayed away from showrooms.

It’s the third year of decline on the trot, following on from two record sales years in 2015 and 2016. Since then, economic uncertainty, worries over Brexit and the public’s confusion over diesel policy, taxation and the global outlook have all conspired to dent new car sales, which have slumped to one of the lowest totals since the dark days of the financial crisis a decade ago. Mike Hawes, the Head of the SMMT admitted "It’s been another turbulent year," adding "Consumer confidence is weak and people are choosing to hold on to their existing cars for longer."

In this regard, we have prepared for you a news report authored by staff writers of the 'Carmagazine 'website under the heading: "New car registrations in UK fall to seven-year low."

According to the Society of Motor Manufacturers and Traders (SMMT), new car registrations in the UK last year fell to their lowest level since 2013.

BBC reported that it was the third consecutive year of decline, and the SMMT expects that trend to continue throughout 2020. Those expectations are largely due to weak consumer confidence and confusion over clean-air legislation.

The organization also said the industry is facing serious challenges adapting to new emissions legislation. It said new rules will require a huge expansion in the use of electric and hybrid cars.

But according to the SMMT’s Chief Executive, Mike Hawes, the fallout from Brexit remains the biggest ‘clear and present danger’ to the sector in the UK.

Figures due out in near future are expected to show a total of 2.31 million new cars were registered in 2019, down two percent compared to the year before.

Since reaching a record high of 2.69 million vehicles in 2016, the market has been steadily contracting, in response to what Mike Hawes describes as a ‘perfect storm’ for the industry.

A key factor has been the collapse in demand for diesel-powered cars, which fell by 22 percent compared to 2018. Where once they accounted for half of all new cars sold, now they make up just a quarter of the market.

The SMMT said uncertainty over future air quality rules, and in particular over potential restrictions on diesel vehicles entering city centers, has left consumers confused.

That, combined with political uncertainty and a general fall in consumer confidence, has meant many potential buyers have decided to hang on to their old cars rather than investing in in new ones.

Hawes said “You can never put it down to one single factor. It has been a perfect storm over the past few years,” adding, “It’s really no surprise the market has been declining. That’s why we need a return of confidence and strong economic conditions.”

The situation is not expected to improve this year, however, with the SMMT forecasting a further 1.6 percent fall in registrations in 2020.

One area in which sales have increased dramatically over the past year is the market for ‘alternatively fueled vehicles’, in other words electric cars and hybrids. They rose by more than a fifth. Registrations of pure-electric cars were up 144 percent, albeit from a very low level.

The problem for the industry is that this increase is not happening nearly fast enough. New EU rules which are being phased in this year, and which enter fully into force in 2021, oblige manufacturers to cut the average CO2 emissions of their new car fleets dramatically — or face swinging fines.

These targets are expected to remain in force, even after the UK has left the EU. But they imply a cut of more than a third in overall CO2 output, and the industry believes that meeting them will be extremely challenging.

In fact, the SMMT calculates that without other changes, the market share of electric vehicles would have to rise from the current 1.6 percent to 27 percent — or the combined share of electric vehicles and hybrids would have to increase from 7.4 percent to 56 percent.

In reality, manufacturers will not rely solely on selling more low — or zero-emission vehicles in order to meet the targets, they will also be able to withdraw their most-polluting models and sell more efficient petrol and diesel vehicles, for example.

But sales of electric and hybrid vehicles will still need to rise very substantially, and Hawes insists government must play a role.

He said “These are still expensive technologies. They carry a price premium,” adding, “That’s why incentives are so significant in determining the uptake.”

But of all the clouds hanging over the industry, one remains darker than the rest in the eyes of the SMMT: the aftermath of Brexit.

Although the UK is due to leave the EU on 31 January, what happens after the transition period remains uncertain.

The government insists it will be able to conclude a trade deal with the EU by the end of the year. But if that doesn’t happen, there remains the possibility that the movement of cars and car parts across the channel could be subject to steep tariffs or disruptive border checks and delays.

Hawes said “That is probably the clear and present danger,” adding,

“Yes, we will always sell cars in the UK and buy cars in the UK. Where they come from will be affected by Brexit. How much you pay will be affected by Brexit. That is right before us now.”

ME/SS