Currently reading: UK car registrations fall 6.8% in 2018, plus 2018's best-sellers revealed
Near-30% decline in diesel demand hits 2018 sales; UK plug-in hybrid and electric growth behind EU average
Jim Holder
News
5 mins read
7 January 2019

UK car registrations fell almost 7% year-on-year to 2.37m units in 2018, with a near 30% drop in diesel registrations accounting for the most marked decline in the market.

Despite the drop - down from a 21st century peak of 2.69m in 2016 - the number of registrations is still in line with the UK’s 10-year sales average, and maintains the UK’s position as the second largest new car market in Europe, behind Germany.

Read more: The 2018 car market winners and losers in detail

December’s figures confirmed diesel registrations have now fallen for 21 consecutive months; by contrast, petrol registrations rose 8.7% for the year, while plug-in hybrid and electric registrations rose 20.9%.

Underlining the impact of the diesel collapse, the 30% fall on registrations in 2018 compared to 2017 equates to 316,000 registrations - more than the drop in total 2018 registrations from the 2017 figure of 2.54m.

Society of Motor Manufacturers and Traders (SMMT) boss Mike Hawes also highlighted other factors that impacted the UK car market, including falling consumer confidence in big ticket purchases as a result of economic uncertainty, issues arising from the Brexit negotiations and the supply shortage in the wake of WLTP economy certification, which lowered some manufacturers’ registrations by almost 50% in September.

“The belief is that consistent messaging and ongoing demonstration of the benefits of the latest diesels could unlock some of the market,” said Hawes. “The evidence is clear: some diesel owners are holding on to their cars rather than replacing them, and if we can bring the facts home to them, then we would hope they will replace them with confidence.”

Large fleet purchases accounted for the greatest drop in registrations, falling 7.1%, followed by private retail purchases, down 6.4% and business purchases, down 5.6%. The most robust sector was the light commercial market, which fell just 1.3%.

Rising CO2 average raises concerns

Hawes also stressed the impact of the decline in diesel sales on CO2 output. Diesel engines typically produce significantly less CO2 than petrol engines, but more NOx and particulates.

The average CO2 output of a car sold in 2018 rose 2.9g/km compared to 2017’s figure, to 124.5g/km. This figure was also impacted by the rise in sales of less efficient vehicles, notably SUVs, and the shift to WLTP measurement techniques, which added around 5% to a car’s official CO2 output.

Under EU law car manufacturers must hit a 95g/km fleet average by 2021, based on European sales, or face fines of 95 euros per gram per kilometre per car.

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Hawes described the situation as “increasingly worrying”, with potential fines based on the current situation reaching hundreds of millions of euros for some car makers. To hit the target car makes must now achieve an average reduction of 8.6% a year - when the target was set of the average reduction needed was 4% a year.

While UK sales are unlikely to count towards the EU averages post-Brexit, the British government has already indicated that it will either mirror the EU rules or impose tougher targets in the event of Brexit being completed by that date.

UK electric uptake lags behind Europe

That situation is further complicated by the lower rate of uptake of plug-in hybrid and electric vehicles in the UK compared to other leading European nations. Despite the sharp rise in demand in 2018, total registrations for both accounted for 2.5% of the total market, with pure electric vehicles accounting for 0.7% of the total - around half the EU average.

Last October the government announced it was dropping grants for plug-in hybrid purchases and reduced the allowance for electric cars and registrations have subsequently dropped dramatically, although the availability of plug-in hybrid vehicles has been severely impacted since WLTP was introduced in September.

Hawes pointed to inconsistent messaging being at the root of a perfect storm of issues causing consumer confusion: “The best way to introduce newer technologies - be they lower emission ones, or ones relating to autonomy and safety and other steps forward - is to get people into newer vehicles.

“I say that in full acceptance that the car industry has a vested interest, but we need to get some clear direction. The government has now acknowledged that the latest diesels on sale today are the right choice for many motorists, and said they won’t be banned from city centres because they clean enough - yet they are still penalised by a VED tax band. The government has laid out a glidepath to zero emissions sales only, yet it has removed or reduced the incentive that was driving people towards those vehicles.

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“Car buyers are quite reasonably confused and we all have a job to do in order to present a consistent, fact-based argument to persuade people of the right vehicles to buy for their needs.

2019 registrations set to fall again

The SMMT is predicting a further 2% fall in registrations in 2019, although Hawes cautioned that the figure was based on “known issues” and that it could swing dramatically.

He highlighted a potential post-Brexit deal economic upswing as a potential positive, and a potential no-deal Brexit slump as “potentially huge”.

However, he added that the retail market would eventually recover from any shocks, saying: “The market may fall, and this could be a very tough year, but the outlook is that it would eventually normalise; the rise in leasing should help insulate against a dramatic fall such as we saw in 2007 and 2008 with the last recession.”

Hawes also reiterated the SMMT’s belief that a no-deal Brexit would deliver a hammer blow to the UK manufacturing industry: “Frictionless trade is what this industry relies on; we have 1100 trucks a day going straight to the manufacturing lines, and warehousing isn’t a long-term option. Tariffs would depress the market. It would certainly have an impact on the industry, including jobs. No deal would be catastrophic.”

2018's most registered cars

1. Ford Fiesta, 95,892 registered; 2. VW Golf, 64,829 registered; 3. Vauxhall Corsa, 52,915 registered 4. Nissan Qashqai, 50,546 registered; 5. Ford Focus, 50,492 registered; 6. VW Polo, 45,149 registered; 7. Mini, 44,904 registered; 8. Mercedes A-Class, 43,527 registered; 9. Ford Kuga, 40,398 registered; 10. Kia Sportage, 35,567 registered.

Manufacturers recording greatest growth

MG +100%; Mitsubishi +31%; Abarth +27%; Subaru +17%; Seat +12%; McLaren +10%; Volvo +9%; Jaguar +4%; Kia +3%.

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Chrisgyale 6 September 2019

the UK car registration will

the UK car registration will cover a vast area across the country.The modern technology is improving day by day at a rapid pace.All the marketing strategies are changing accordingly across the globe.The custom writing is helping the investors to get their business content for publishing.

That bloke 7 January 2019

McLaren (giving people the

McLaren (giving people the cars their customers want) sales up 44%!!!  Build it, and they will come.  Suzuki are doing ok with their new Jimny (demand outstripping supply), and plenty of others, too.  As usual, companies who are 'in trouble' have only themselves to blame, not politics.

HiPo 289 7 January 2019

Increased SUV sales driving rising CO2 emissions

Great that the SMMT has finally admitted that the increase in SUV sales is at least partly the cause of rising CO2 levels.  It was always bending the truth to say that it was all to do with the switch away from diesel.

But given that Euro 6 diesels will likely be banned from entering some German cities, it may be too optimistic of Mike Hawes to encourage people to keep buying diesels. Other European and UK cities could follow where Germany leads, damaging diesel resale values further.

The real problem highlighted by the SMMT today is that the UK is lagging behind the rest of the EU for uptake of electric vehicles.  That is a really poor performance, especially when you consider that Norway, the EV leader, isn't even in the EU, so isn't counted in those stats. We are a nation of innovation and invention, why are we so slow to go electric?