Rising AFV sales are the silver lining in the cloud of diesel decline, says Auto Trader

Time 3:42 pm, July 5, 2018

RISING sales of alternatively fuelled vehicles offer a glimmer of hope amid the continuing decline of diesel – that was one of the reactions by industry experts to the latest new car sales figures from the Society of Motor Manufacturers and Traders.

The data released today shows that sales fell 3.5 per cent year-on-year in June, with diesel bearing the brunt of it, while AFV performance strengthened.

Ian Plummer, director at Auto Trader, said the sale of new AFVs now would mean more eco-friendly options for used car buyers in the near future.

‘Every month seems to bring more negative news about diesel,’ he said. ‘But the bright spot for the industry in June’s figures is that electric and hybrid sales are really starting to gain traction and pick up some of the slack. If current trends continue, it probably won’t be much more than a couple of years until AFVs overtake diesel in sales volumes.

‘AFV registrations in June were 15,549 – still well below the 74,361 diesels, but 45 per cent up on last year, and the rate of growth is accelerating. AFVs now account for 6.6 per cent of all new car sales.

‘Looking ahead, there is a healthy pipeline of very impressive “second-generation” hybrid and electric models coming into the market over the next year, which will provide more choice for consumers considering a switch. Combined with new charging infrastructure being installed across the country, demand for electric is likely to grow at an ever-faster pace.’

Sean Kemple, director of sales at Close Brothers Motor Finance, said: ‘It’s been a disappointing June, but dealers shouldn’t lose confidence in the market. This month follows two strong consecutive months of increased new car registrations. AFVs have seen a steady rise in demand, and petrol sales are also reassuringly strong.

‘The industry is going through a period of change, and dealers need to stay focused in order to protect their bottom lines. It’s crucial to keep a close eye on fluctuating demand and adjust the stock sitting on the forecourt accordingly.’

Meanwhile, Ian Gilmartin, head of retail and wholesale at Barclays Corporate Banking, said: ‘A dip in overall new car sales is no surprise, considering the plethora of challenges being faced by sellers. The industry has rightly been more vocal in recent weeks, with the lack of clarity around what the playing field will look like for the motor market post-Brexit growing.

‘As we saw with Jaguar Land Rover’s warning this morning, patience is running out for both manufacturers and retailers, with all parts of the industry hoping to see some material progress to allow them to plan for the future.

‘As today’s data shows, it’s not just a trade issue, with wider questions over diesel policy posing another headache for operators as diesel purchases fell by almost a third in June. The sector has to focus on delivering more environmentally efficient vehicles, but diesel cars have a part to play in this and consumers need reassurance that a diesel purchase is still a sensible move.’

Andrew Hooks, chief operating officer at Carwow, painted a more optimistic picture, but still warned of potential challenges to come.

‘Upcoming changes in emissions regulations give us hope that the summer months can provide some spark for the industry after so much continued uncertainty in 2018,’ he said. ‘The introduction of new WLTP [Worldwide Harmonised Light Vehicle Test Procedure] emissions tests from September means there are great deals for car buyers over the next couple of months with in-stock vehicles.

‘However, without more education of the car-buying public as to the benefits on offer, this abbreviation will just be another source of confusion.

‘The bigger picture, however, is still one of uncertainty for consumers. What’s the future of diesel? Are electric vehicles a viable option for the everyday driver? Add new emissions regulations into the mix and it’s no surprise buyers are hesitant.’

MORE: Moderate decline in new car market in June, reports SMMT

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