Near-30% decline in diesel demand hits 2018 sales; UK plug-in hybrid and electric growth behind EU average
Jim Holder
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.”

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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.

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.

“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%.

Manufacturers recording largest falls

Infiniti -79%; DS -45%; Nissan -32%; Maserati -24%; Fiat -20%; Audi - 18%; Alfa Romeo -17%; Ford -12%.

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

Read more

UK car industry: no-deal Brexit could have 'devatsting impact"

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Comments
12

7 January 2019

 Best guess?, that’s all we have, will leaving or not be any good?....who knows?, either way Car prices will go up and trade in will go down, a double whammy for us the punter, not the Car industry at fault.

Peter Cavellini.

7 January 2019

When it comes to cars we pretty much buy what we need, so in some ways I'm glad we spending less and making cars last longer, most cars are now lasting 150,000+ miles with ease so why should we keep buying.

Always good to see diesel getting a kicking and a drop down to 20% of the market will be about right and what I've been saying for some time.   On the CO2 output rising 3%, well as it says it's more down to WLTP measurement techniques (which added around 5% to a car’s official CO2 output), so diesel lovers can now put that argument to one side now.

typos1 - Just can’t respect opinion

7 January 2019

That 5% WLTP increase only kicked in for the last quarter so it could only have caused a 1.25% increase to the annual figure. Therefore the extra increase up to 3% was because of fewer diesel sales. Sorry, but diesel lovers are back in the game!!

7 January 2019

Doesn't say when the new method was applied, Volvo for instance were well ahead of the game. Also, remember European Car emissions are only a small part of Global CO emissions so a couple of % points increase is pretty minor, especially when if it results in reduction NOx and dirty particles.

Diesel should never have got to 50% of market, it'll never go back to that level!

typos1 - Just can’t respect opinion

7 January 2019

A HMV store manager was interviewed by our local rag this weekend, someone who'd been selling music related products for over 35 years. Asked for reasons which lead to HMV's current financial crisis, he cited Brexit "People don't want to spend money with all this uncertainty over Brexit".

Don't know about ayone else but 'Brexit' never enters my head when I make a purchase, and I don;t see any reason why it should. It didn't make a difference when I bought my car last year and it certainly wouldn't make a difference if I were buying a CD.

Just wondering if anyone has held back on a purchase because of Brexit? 

7 January 2019

Not me!

7 January 2019

Although my desire to buy German again is waning

typos1 - Just can’t respect opinion

7 January 2019
scotty5 wrote:

A HMV store manager was interviewed by our local rag this weekend, someone who'd been selling music related products for over 35 years. Asked for reasons which lead to HMV's current financial crisis, he cited Brexit "People don't want to spend money with all this uncertainty over Brexit".

Don't know about ayone else but 'Brexit' never enters my head when I make a purchase, and I don;t see any reason why it should. It didn't make a difference when I bought my car last year and it certainly wouldn't make a difference if I were buying a CD.

Just wondering if anyone has held back on a purchase because of Brexit? 

 

I certainly wouldnt be buying a house/commiting myself to larger mortgage before Brexit nor would I commit to a heavy monthly bill to fund a new car until we know what is going to happen.

it definitely wouldnt stop me buying CDs though, thats clearly nonsense. 

7 January 2019
scotty5 wrote:

Don't know about ayone else but 'Brexit' never enters my head when I make a purchase, and I don;t see any reason why it should. It didn't make a difference when I bought my car last year and it certainly wouldn't make a difference if I were buying a CD.

Just wondering if anyone has held back on a purchase because of Brexit? 

 

Lucky you, in the minority well off group that has enough money/security to not worry - thats not the case for the many

7 January 2019
Rtfazeberdee wrote:

scotty5 wrote:

Don't know about ayone else but 'Brexit' never enters my head when I make a purchase, and I don;t see any reason why it should. It didn't make a difference when I bought my car last year and it certainly wouldn't make a difference if I were buying a CD.

Just wondering if anyone has held back on a purchase because of Brexit? 

Lucky you, in the minority well off group that has enough money/security to not worry - thats not the case for the many

I worry more about my health and that of my family than I do about buying a new car.

typos1 - Just can’t respect opinion

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