New car demand falls in April as plug-in hybrids take a hit

The UK new car market declined by -4.1 per cent in April, according to figures released by the Society of Motor Manufacturers and Traders (SMMT). The month saw 161,064 units registered, the second lowest April volume since 2012 but following a double-digit increase the previous year.

Registrations by private motorists fell last month, down -10.3 per cent, after a rise of more than 26 per cent in April 2018. Fleet demand, meanwhile, remained stable, growing 2.9 per cent, with these businesses registering 2,498 more cars than in April 2018.

Declines were recorded across most vehicle segments, with registrations of popular supermini and small family cars falling most significantly, down -14.1 per cent and -10.6 per cent. Demand for lower volume luxury saloons and sports cars rose while the dual purpose segment also grew, by +18.4 per cent to 40,580 units. These vehicles are now the third most popular body type, with registrations tripling since 2012.

Diesel registrations fell again, but the pace of decline slowed significantly, down -9.4 per cent. Petrol demand also dropped, by -3.0 per cent.

Overall, alternatively fuelled vehicle (AFV) registrations grew by 12.7 per cent, with 10,254 leaving showrooms. Petrol electric hybrids remained the most popular choice, up 31.1 per cent to 6,810 units. Battery electric cars also recorded a strong uplift, from 929 to 1,517 units, which still only represents 0.9 per cent of the market.

Meanwhile, zero emission-capable plug-in hybrids experienced a significant decline, down -34.4 per cent in April and -20.4 per cent year-to-date – evidence of the consequences of prematurely removing upfront purchase incentives before the market is ready.

Manufacturers are investing heavily to bring ultra-low and zero emission cars to market, with some 40 plug-in models now available in showrooms, and over 20 more expected to arrive in 2019. However, if this still emerging sector is to reach meaningful levels, measures and incentives that build business and consumer confidence will be vital.

Mike Hawes, SMMT chief executive, said: “While it’s great to see buyers respond to the growing range of pure electric cars on offer, they still only represent a tiny fraction of the market and are just one of a number of technologies that will help us on the road to zero. Industry is working hard to deliver on this shared ambition, providing ever cleaner cars to suit every need.

“We need policies that help get the latest, cleanest vehicles on the road more quickly and support market transition for all drivers. This includes investment in infrastructure and long term incentives to make new technologies as affordable as possible.”

Solid demand at franchised dealerships

Commenting on the latest figures, Sue Robinson, director of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers in the UK, said: “The new car market declined by -4.1 per cent affected by Easter falling in April this year, which, alongside the warm weather, caused a slowdown in physical footfall to dealerships”.

Robinson added: “Positively, there continues to be solid demand at franchised dealerships for used and nearly new cars (ie vehicles under one year old), which provide excellent opportunities for all types of motorists.

“The aftersales segment also remains strong and recent evidence showed very high levels of consumer satisfaction with the service provided by franchised retailers, especially for alternative fuel vehicles. We expect franchised retailers to increasingly benefit from the growing popularity of this segment.

“The uncertainty surrounding Government’s decisions on Brexit continues to affect consumer behaviour in the new car market. It is vital that clarity on the UK’s future relationship with the EU is provided as soon as possible”.