Diesel Slump Continues

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New Car Sales Market Continues to Slide

The UK car sales market is still shrinking. Figures released by the Society of Motor Manufacturers and Traders (SMMT) have confirmed the damage year on year. Total new car sales are down to 2.37 million, equivalent to a 6.8% drop over the previous 12 months.

Diesel hit

Worst hit was diesel; the fuel type saw a 29.6% fall in 2018, that volume loss is equivalent to around 180% of the market’s drop. December also marked the 21st month that diesel sales were down.
The ‘dirty diesel’ wheels keep on turning, not helped by the lack of clarity from government and car manufacturers alike.

This withdrawal from diesel is no doubt going to harm emissions. CO2 levels have been recorded since 1997 and yet the UK new car fleet average was up for a second year running. The increase this year was 2.9%, increasing the grams per km emitted to 124.5. Manufacturers are fighting hard to bring emissions down, with the average new model pumping out 8.3% less CO2 than its forbears.

This new figure has to be taken with a pinch of salt though. New WLTP regulations have produced higher emissions figures, which the switch from diesel is undoubtedly affecting.

Fleet sector

Across private, business and fleet the losses were felt hardest across the fleet sector, down by 7.3% compared to 6.4 for private owners and 5.6 for business. Total fleet sales dropped from 1,319,193 in 2017 to 1,222,849 last year, a difference of 96,344.

The impact of Brexit and the diesel furore are clearly making fleet buyers hang on to their ageing stock. They seem to be playing the long game, to see both the state of the economy and  what WLTP will bring. There’s also been little relief for company car drivers. Fingers are being crossed tightly to see whether an autumn budget will inject some life back into the sector.

Diesel still gives around a 15-20% efficiency over petrol. The lowering of emissions in recent years is also thanks to the great diesel push made by the previous few governments. It’s worth pointing out that diesel technology today is the cleanest it’s ever been; the only real concern is the microscopic diesel particulates which petrol cars don’t produce.

Alternative Fuelled Vehicles

Sales of Alternative Fuelled Vehicles (AFV), which are petrol-electric hybrids, have risen but nowhere near enough to combat the diesel losses. The segment rose by 21.3% to 81,156 units.

Growth is starting to slow for plug-in hybrids or PHEVs, even though they were up by 24.9% over the previous 12 months. The sluggish sales are blamed on the Government cutting the plug-in car grant in October; this trend looks set to continue in 2019.

Pure electric car sales grew by a healthy 13.8%, but sales are still a meagre 15,474 which account for just 0.7% of the market as a whole.

To learn more about Alternative Fuel Vehicles click here to visit our dedicated AFV page

Leasing

The drop in new car sales may prove to provide a boost for leasing companies. As businesses show reluctance to invest capital in new vehicles, they may be encouraged to lease short-term or over longer periods. If you’re thinking this could be the way forward for your company, have a chat with the team at CLM and see what we can do for you.

January 23rd, 2019|Categories: Fleet, Vehicles|

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