3:03 pm, August 19, 2020
Car dealers and consumers can expect less choice and fewer models from brands in car showrooms in the future, as the UK adopts strict EU CO2 emissions targets from next year.
Speaking exclusively to Car Dealer, SMMT chief executive Mike Hawes, said how the UK’s ‘copying and pasting’ of emissions regulations will result in less choice for customers in terms of the number of models available, but there will be a greater selection of powertrains.
‘As of December 31, the UK government is going to pick up EU legislation and put it into the UK, so that means picking up CO2 legislation for new cars,’ said Hawes, in the interview at top of this story.
From next year, the UK will carry over the EU’s strict legislation that car brands have to have an average of 95g/km of CO2 across their entire model range. And because the UK will be outside of the EU from 2021, that CO2 average will be on UK car sales, not European ones.
‘There are going to be some winners and losers on this and if you look at the UK car market we tend to buy on average bigger, heavier vehicles than say Italy or France. While European manufacturers have been able to trade off selling small cars in Italy, for example, and larger ones in Germany and big SUVs in the UK, that flexibility won’t be there.
‘All manufacturers will have to do the maths – what is our average fleet CO2 going to be in the UK from the end of this year? Otherwise there will be fines and those fines are a literal cut and paste; they just substitute a euro sign through an exchange rate for a pound sign.’
Without manufacturers being able to balance sales of certain cars in the UK with others in Europe, there could be less choice in UK car showrooms believes Hawes.
‘A lot of manufacturers are currently questioning the relevance of the supermini segment because how do you bring a car like that to market and basically break even? Given the regulations that would be very tough,’ said Hawes.
‘Small, niche products, especially ones with high CO2, might be very profitable, but to what extent can the manufacturer offset that with lots of smaller, more efficient models? We might see a contraction in the number of models.’
Hawes did add, however, that while there’s likely to be less choice in the number of models, there may be greater choice of powertrain options for the cars that continue to be sold in the UK.
‘This will facilitate hybrids, plug-in hybrids and full-electrics and potentially hydrogen for some brands in some segments,’ he said. ‘So there will be more choice there and the challenge is making sure the consumer is informed and making the right fuel choice for their lifestyle.’
Hawes believes that the new UK legislation will not weaken over time, however.
‘What happens in the future for legislation, we don’t know, but I would assume it will not weaken in the UK compared to Europe.
‘The UK wants to be the leader of this transition to zero. No-one in the UK industry is under the allusion that there will be any relaxation in terms of climate change and air quality regulations.’
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