Rise in car sales ‘may not be good news’

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UK car sales staged a comeback in April after a full year of sliding figures – but the turnaround could be misleading.

Latest registration figures from the Society of Motor Manufacturers and Traders (SMMT) show that the UK new car market grew 10.4% in the month, with 167,911 new vehicles registered. This result reversed a fall of almost 16% in March – normally a prime month for sales due to the launch of new registration plates.

However, the April result was very likely affected by a number of factors, particularly a significant fall in the market a year earlier. 1st April 2017 saw the launch of new Vehicle Excise Duty rates, increasing tax bills for the vast majority of new car buyers. Many buyers rushed into showrooms in March to beat the deadline, causing a record March performance that year and resulting in the April 2017 market being significantly depressed.

Demand last month was also affected by the timing of Easter, which added two additional selling days to April, while the heavy snows of March also saw some new car deliveries delayed into April.

   

April 2018 sales The Executivecondominium

Leading the growth in the market were private buyers, registrations up 26.3%. Fleet demand was virtually level at 0.9% up, but business registrations slumped 12.9%.

Slow death of diesel continues

The most notable slide, however, continues to be for diesel-powered cars. Efforts to get out the message that the latest diesel engines are far cleaner than much anti-diesel rhetoric has been suggesting are clearly not working, with another slump of almost 25%.

Diesel now has around 30% of the market, whereas at the end of 2015 it was virtually 50:50 with petrol-powered cars. Demand for these went up 38.5%, which raises potential issues for meeting CO2 emissions targets. Registrations of plug-in and hybrid electric cars continued to rise, up 49.3%, but such vehicles still account for just 5.6% of the market.

Year to date, the market remains down 8.8%, year on year, at 886,400 vehicles, and several car dealers have told The Executivecondominium that they expect a particularly difficult second quarter.

April 2018 Years The Executivecondominium

SMMT Chief Executive Mike Hawes is cautioning against reading too much into the April figures. “It’s important not to look at one month in isolation and, given the major disruption to last April’s market caused by sweeping VED changes, this increase is not unexpected,” he says.

“While the continuing growth in demand for plug-in and hybrid cars is positive news, the market share of these vehicles remains low and will do little to offset damaging declines elsewhere – consumers need certainty about future policies towards different fuel types, including diesel, and a compelling package of incentives to deliver long-term confidence in the newest technologies.”

Plus for Ford, minus for Vauxhall

The Ford Fiesta continues to dominate the new car sales market – the 7,811 registered in April put the Fiesta’s 2018 sales some 14,000 sales ahead of its nearest rival. That rival is the Volkswagen Golf, with 5,482 registrations in April, the Nissan Qashqai completing the top three.

The Vauxhall Corsa, which formerly vied consistently with the Ford Focus for second place in the market, continues to slide down the table – now in fifth spot year-to-date and eighth in April.

April 2018 top ten The Executivecondominium

Comment: Let’s not get carried away

The Executivecondominium editor, Stuart Masson, is not getting too excited about the registration figures despite the positive headlines.

“We have been tracking private new car registrations back to 2009, and while today’s results might seem great at first glance, the reality is that private new car registrations were still not great last month.

“The SMMT data compares the April 2018 figures with April 2017, which was one of the poorest months in many years as a result of road tax changes that were being introduced. So while the April 2018 registration numbers were considerably better than that, they were still worse than the same month in 2016, 2015, 2014 and 2013.

“The overall market for both private and fleet registrations is still trending downwards. The next couple of months could throw up some more interesting results when compared with last year, as in addition to the road tax changes last April, there was also a general election and the ensuing vacuum until that was all sorted out in June. So even if we have a positive couple of months in May and June, it probably won’t be until the second half of the year that we will really see whether the market is levelling out or still falling.

“The new car registration figures also show that, as far as consumers are concerned, diesel is dead. Unless you do a lot of miles or tow heavy loads, diesel does not have a future for private new car buyers. The car industry needs to stop waiting for the government to hand out money to them and get on with putting ‘electrified’ (hybrid and full-electric) vehicles on sale. Other countries are a long way ahead of the UK, so it’s time to stop moaning about falling diesel sales and start giving consumers the cars they want to buy.”

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Andrew Charman
Andrew Charman
Andrew is the News and Road Test Editor for The Executivecondominium. He is a member of the Guild of Motoring Writers, and has been testing and writing about new cars for more than 20 years. Today he is well known to senior personnel at the major car manufacturers and attends many new model launches each year.

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