Response to disappointing new car sales from SMMT

Tuesday, November 6, 2018 - 08:50
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There has been some response to the disappointing new car sales as reported by the Society of Motor Manufacturers and Traders (SMMT) for October 2018.

Ashley Barnett, Head of Consultancy at Lex Autolease: “October’s decline is not unexpected. As it stands, company car drivers who renew now are doing so without knowing the tax consequence beyond 2021.  It is positive that more clarity will come in spring, but the uncertainty in the interim will make it difficult for drivers and fleet decision makers to commit to fleet replacements.

“We recommend that fleet operators consider extending existing agreements until the outcome of the WLTP consultation is known, or consider electing for an interim three-year replacement cycle. This would give them a clearer insight into the tax regulations beyond 2021 and most likely a better view of the additional zero-emission technology that will be available the next time they renew.  There may be an extra cost in the short term, but these measures would leave their fleet better placed to adopt newer, cleaner technology in 2021.

“Alternatively, employees may decide that company cars are unattractive in light of this tax uncertainty, the unintended consequence being that many may be pushed towards a less-regulated grey fleet environment.  In this scenario, higher emissions and safety issues create new challenges, and progress against the government’s Road to Zero strategy is slowed.

“With emissions targets in mind, it’s disappointing to have seen a month-on-month decline in plug-in vehicle registrations, especially following the news that the new, lower rate for the Plug-in Car Grant has been brought forward – which is likely to impact this market further.”

Jon Lawes, Managing Director, Hitachi Capital Vehicle Solutions reacts to SMMT car sales figures: “A 30.7% year-on-year rise in motorists buying hybrid or electric cars is a rare bright spot in an otherwise disappointing couple of months for the UK new car market.

“This demand for AFVs ties in with the trends we’re seeing in our own research, which shows that 82% of fleet managers believe it’s important to move towards AFVs and 42% of fleets are planning to add more AFVs within the next two years.

“The big question now is whether this enthusiasm will be sustained following the recent announcement of the removal of subsidies for hybrid cars which, as the SMMT rightly highlights, could undermine efforts to lower emissions.”

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