UK car market declines amid strict environmental policies

London – The UK new car market declined by 6.8% in 2018, with annual registrations falling for a second year to 2,367,147 units, according to figures released by the Society of Motor Manufacturers and Traders (SMMT) 3 Jan.

The industry witnessed a sharp 5.5% year-on-year decline in December, ending a year of what the SMMT described as "anti-diesel policies".

“A second year of substantial decline is a major concern,” said Mike Hawes, SMMT chief executive.

“Falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market,” he added.

According to Haws, the industry is facing “ever-tougher environmental targets against a backdrop of political and economic uncertainty”. Such circumstances are weakening demand, he warned, adding that “these figures should act as a wake-up call for policy makers.”

Private, fleet and business registrations all fell in 2018, with the biggest losses felt in the fleet sector with a negative 7.3% performance. Private motorists and smaller business operators registered declines of 6.4% and 5.6% respectively in 2018.

Demand also fell across all vehicle segments bar the dual-purpose category, which grew by 9.1% to take more than fifth of the market with a 21.2% share.

Despite registrations of “superminis and lower medium cars” falling by 2.5% and 9.4% respectively, these smaller vehicles remained the most popular with a combined 58.7% market share.

The biggest volume decline was seen in the diesel sector, which was down 29.6% in 2018, with the volume loss equivalent to some 180% of the overall market’s decline.

“Anti-diesel rhetoric and negative fiscal measures took their toll, with December marking the 21st consecutive month of decline for the fuel type,” the SMMT noted.

Registration for petrol and alternatively-fuelled vehicles rose 8.7% and 21% respectively. This, however, was not enough to offset the full shortfall as many diesel owners adopt a ‘wait and see’ approach, the SMMT added.