New car registrations fell in 2019 to their lowest level since 2013, according to data from the Society of Motor Manufacturers and Traders (SMMT).
It was the third consecutive year of decline, with overall registrations down by 2.4 per cent to 2,311,140.
The SMMT said that the continued struggles of the UK car industry reflected political and economic uncertainty, weak consumer confidence and confusion over new emissions laws and urban low-emissions zones.
Mike Hawes, chief executive of the SMMT said the figures were a “significant concern for the industry and wider economy”, and would undermine wider environmental goals as well as having a major economic impact.
Diesel down, electric up
The decline in registrations was driven by a drop in demand from private buyers down three per cent and showed a continued move away from diesel towards alternatively fuelled vehicles (AFV).
Diesel registrations were down 22 per cent and December 2019 marked the 33rd consecutive month of declining diesel registrations. Petrol registrations were up slightly – by 2.2 per cent – but the major growth was in hybrid and all-electric cars, up 17 and 144 per cent respectively.
While EV registrations soared over the past 12 months to a record 37,850, Hawes cautioned that they still represent less than two per cent of the whole market and called for rapid improvements in policy, incentives and infrastructure to help speed up their adoption.
He said: ““A stalling market will hinder industry’s ability to meet stringent new CO2 targets and, importantly, undermine wider environmental goals. We urgently need more supportive policies: investment in infrastructure; broader measures to encourage uptake of the latest, low and zero emission cars; and long-term purchase incentives to put the UK at the forefront of this technological shift.”
While AFV registrations rose significantly, the SMMT said that confusion over proposed clean air zones in many cities could hold back progress towards meeting environmental goals. It warned that drivers were holding onto older, more polluting cars for longer while they wait for emissions zone legislation to be decided upon. It also pointed out that average fleet CO2 emissions rose for the third year in a row, due in part to the decline in diesel registrations and in part to the more stringent WLTP testing procedures which produced higher results for most vehicles.
Most observers agreed that the continued uncertainty over Brexit has harmed consumer confidence but some observers predicted that the result of December’s general election would provide stability which could help the market.
Alex Buttle, director of Motorway.co.uk commented: “There’s still a huge dark cloud hanging over us with no EU trade deal on the table, but if consumers needed certainty to start buying again, they received it in the form of a majority Conservative government.
“Leaving the EU on January 31 may stall a recovery in car sales in the short term, although early signs are encouraging. But at the very least, we now have a government that can make decisive decisions and the first should be agreeing a positive future relationship with the EU for our auto industry, which avoids punitive tariffs and barriers that could lead to higher prices and less retail choice.”
James Fairclough, CEO of AA Cars, added: “As with most of 2019, political and Brexit uncertainty hovered over much of December, but last month’s election will hopefully spark a much-needed resurgence in sales this year.
“Looking ahead, hopefully 2020 will see the continued growth of electric and hybrid vehicles. Their sustained growth provided a positive thread throughout 2019, with drivers showing great enthusiasm for environmentally-friendly cars.”
Seán Kemple, director of sales at Close Brothers Motor Finance, said: “There’s no denying that the motor industry has suffered in the last year, but there’s hope for 2020. The drop of 2.4 per cent in year to date sales compared to 2018 reflects the strain of Brexit uncertainty on consumer confidence, and the impact of mixed messages around fuel type.
“2020 holds the key to a new era of car buying. Electric is set to spark, and we can expect to see legislative changes that make alternative fuelled vehicles more attractive to potential buyers.”