Weak consumer confidence hits UK new car market

Weaker consumer confidence hits new car market with small bounce back in the used-car sector.

A 6-7% fall in UK new car registrations in October reflected weaker consumer confidence, according to national trade body the Society of Motor Manufacturers and Traders (SMMT).  Most of the weakness is in the private sector, down 13.2%, compared to a stable demand for fleet vehicles,

Alternatively fuelled vehicles saw 14,231 registrations, reaching a 9.9% market share, however overall annual figures to October 2019 show the new car market down 2.9% with 58,897 fewer cars registered than October 2018.

There was a mixed picture across body types, with the popular supermini segment experiencing a substantial decline (-23.4%), while dual purpose and small family car registrations grew by 7.1% and 3.3% respectively.

As with much of the rest of Europe, diesel vehicles have taken the most significant hit, with a 28.3% year-on-year sales drop and a market share of just 24.2%. However, the biggest growth area is MHEV (Mild Hybrid EV) diesel which has seen a rise of 378% since October 2018, although total market share is only 2.3%.

SMMT puts the new car market decline down to uncertainty over diesel and clean air zones, stunted economic growth and uncertainty over Brexit.

Meanwhile the used car market sales grew 0.9% in Q3 with a little more than two million vehicle transactions. This follows nine straight quarters of decline, according to SMMT figures, with year-to-date for 2019 down 0.8% fall to 6.1 million units.

With residual prices falling significantly, demand for used diesel vehicles was up 1.4% in the quarter, while petrol sales were mainly flat. Plug-in electric and hybrid models sales increased by 13.0%, totalling 37,589 units.

Mike Hawes, SMMT Chief Executive, commented: "This growth, following a prolonged period of decline, is encouraging and it’s great to see a growing appetite for plug-in and hybrid models as they start to filter down to the used market. However, ongoing economic uncertainty and growing confusion over local clean air zones make it difficult to predict the future.

To make meaningful environmental gains, we need to get more of the latest, lowest emitting cars on to our roads replacing older ones quickly – and that means delivering the right conditions and policies to give new and used buyers confidence to invest in the vehicles that best suit their driving needs and budgets."