SMMT: Comments on car market report

Wednesday, November 6, 2019 - 09:39
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Charles Butler, motoring expert at commented:

“It’s surprised no one that the Brexit uncertainty has continued to have an impact on consumer confidence, and not even the predicted but now defunct 31st October deadline pushed people into making a decision. Would-be new car buyers assaulted by noise in the market about price fluctuations have chosen the best action to be to take no action and defer, and this is bad news for what has been an incredibly sluggish year for the industry.

“Diesel sales continued to fall; no doubt partly driven by the increased environmental awareness that has seen Alternatively Fuelled Vehicles (AFVs) take a record market share. Carwow has seen a 6% increase in the popularity of electric vehicles, driven by demand for plug in hybrids, whereas pure electric interest, whilst high, has remained quite flat – potentially due to limited stock, which we expect to improve as we move further into Q4. AFVs repeatedly make headlines, fuelling interest. To convert the demand into sales, manufacturers need to focus on bringing down the price of going electric, there is evidence this is already happening but there is more work to be done, and the government needs to be doing all it can to minimise range anxiety and ensure the infrastructure is ready to cope.”

Jon Lawes, Managing Director, Hitachi Capital Vehicle Solutions:

“Alternatively fuelled vehicles have now reached a 9.9% market share and the industry will take real encouragement from this.

“With battery electric vehicles almost tripling (+151.8%) and hybrid electric vehicles increasing by 28.9%, the shift in demand is now making a real difference as more environmentally-friendly vehicles are sought by buyers. We expect this trend to continue in the coming months as our own research found that 62% of consumers support the move to electric.

“Whilst overall car registrations continued to fall in October, a priority for the new government should be the reinstatement of long-term incentives in the New Year to support the transition towards electric vehicles amongst consumers and fleets.”

Michael Woodward, UK automotive lead, Deloitte, said:

“New car registrations in fell -6.7% compared to the same time last year, as consumers and businesses display continued caution.

“Concerns about personal finances and a fall in consumer confidence in the third quarter mean many are shying away from major purchases. According to Deloitte’s latest Consumer Tracker data, just 4% plan on purchasing a vehicle in the next three months – the lowest level recorded in the Tracker’s nine-year history.

“That said, it is encouraging to see consumer confidence in new technologies increase, as sales of electric and hybrid vehicles reached a market share of 9.9% this month. We expect sales in this area to accelerate next year, as the incoming 0% company car tax rate on zero emission vehicles comes into effect.

“The long-term decline in overall sales however, and the impact it is having on the residual values of stock, also means that dealers are becoming less inclined to pre-register cars. This has been an important driver of new car sales in the past, but exposes dealers to financial risks they are no longer willing or, in some cases, able to take.

“In the face of falling sales, rising costs and increased competition from personal leasing companies, some dealers will increasingly need to think of innovative ways around financing and leasing, and online sales, to serve the changing consumer.”

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