THE Society of Motor Traders and Manufacturers (SMMT) now predicts the UK car market will register only 2.565m cars – 4.7 per cent down on 2016 and 29,000 fewer than last quarter’s estimate.
Figures out today from the SMMT reveal that it is predicting a staggering decrease in new car registrations over the next two years, stating that by 2019 only 2.397m will be registered. This will mark a reduction of 300,000 units compared with 2016’s peak.
The motoring body expects that diesel figures will drop by 15.1 per cent compared with 2016’s registrations, and dealers won’t sell more than one million of the black pump-powered cars in 2018 (0.989m). This will decrease even further in 2019 to 0.943m – a 27 per cent drop compared with 2016.
Car registrations have suffered badly in 2017 with seven months of decline reported by the SMMT, and October’s figures out next week are expected to follow suit. Manufacturing in the UK has also dropped off, thanks in part to a fall in domestic demand.
If the predicted figures are accurate, car sales will be lower than those achieved in 2015 and by 2019 will fall to below 2014 levels.
James Baggott, editor in chief of Car Dealer Magazine, said: ‘UK car buyers’ love affair with diesels seems to be well and truly over. Despite being encouraged to buy one a few years ago, now a swirl of negative publicity has rung the death knell for the once-popular models.
‘That’s a real shame, because for many drivers a modern diesel engine, which complies with Euro 6 regulations, is actually far more economical and efficient, if they travel long distances regularly.
‘Manufacturers are ploughing huge resources into launching new electric and hybrid vehicles, so it will be interesting to see if buyers who are ditching diesels swap into these ultra low emissions vehicles instead.
‘The overall drop in new car sales is not altogether unsurprising. Political uncertainty surrounding Brexit and a squeeze on spending as prices increase means often the first thing to be put off is a new car purchase. Car manufacturers and dealers will have to work hard to entice buyers to part with their cash in the next few years.’
Chris Bosworth, director of strategy at Close Brothers Motor Finance, added: ‘Following six consecutive months of falling car sales, including a disappointing dip in the traditionally successful September when new registration plates are introduced, the latest predictions from the SMMT are likely to concern manufacturers and franchised dealers.
‘There has been an unprecedented number of headwinds to the car industry this year with VED changes, continued Brexit uncertainty, a weak pound and the 2040 ban on petrol and diesel cars. Whilst registrations are expected to stabilise in 2019 with a forecast figure of 2.397m, we’ve yet to see the full consequences of a simultaneous shift in consumer behaviour and government and regulator policy changes.
‘Consumers will increasingly look to the used car market to reduce their depreciation risk and overall financial exposure in times of uncertainty. Dealers need to ensure they’re ahead of the curve and that they’re offering consumers the full range of finance and appropriate stock to respond to reducing consumer confidence.’
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