Auto Trader's response to Society of Motor Manufacturers and Traders' (SMMT) 2018 new car registrations and the health of the market
“Despite what’s been a year of unprecedented challenges for the industry, 2018 closed in relatively good health. And whilst the same issues will still be felt during the months ahead, 2019 holds some significant bright spots for retailers, manufacturers and consumers alike” said Ian Plummer, Auto Trader director.
“Brexit anxieties cast a long shadow last year and will continue to do so. A ‘no deal’ will likely impact new car sales as poor exchange rates and potential tariffs could force brands to pass on the cost to consumers. However, a smooth Brexit resulting in stable exchange rates and trade agreements, would signal to manufacturers that the UK remains a positive growth market with good profit opportunities, ensuring both a healthy pipeline of new stock and some great deals for consumers.
“Due to March’s highly desirable plate change, the first three months of the year represent almost a third of the industry’s total annual sales and are therefore key to a successful year for any brand or retailer. However, with Brexit looming, brands will be facing even greater pressure to hit the ground running in 2019 to offset any potential shortfall following the UK’s withdrawal of the EU. Coupled with the need to make up for the loss of sales following the introduction of the Worldwide Harmonised Light Vehicles Test Procedures (WLTP) in September, there should be some great bargains for car buyers over the coming weeks.
“Over the last 12 months we’ve seen some trends emerge which are set to accelerate in 2019, not least the growing consumer appetite for alternatively fuelled vehicles (AFVs) which has come largely at the expense of diesels. Mirroring their actual sales growth in the new car market, we saw AFVs reach a record seven percent of all fuel related searches on our marketplace in December. Similarly, the average price of a used AFV climbed to £20,828 in November, the highest rate recorded.
“We can expect this popularity to surge this year as a truly exciting array of second-generation electric vehicles hit the market in the coming months. Along with the continued trend towards crossovers and SUVs, which have been driving both the new and used car markets in 2018, they’ll provide brands with a much welcomed opportunity to offset last year’s sales deficits.
“What’s more, as more consumers move away from traditional ownership to usership models, the appetite for finance will remain exceptionally strong in 2019. PCPs have fuelled market growth over the past years with 9 in 10 new cars sold now on finance. But leasing and subscription models are beginning to open up the market even more and have the potential to unlock further growth as they make accessing a car, including expensive new electric vehicles, an easier and more financially attractive option to a wider demographic of consumers.
“Looking at the coming year as a whole, we anticipate that the market will remain in relatively good health. However, as a result of the industry having to manage similar headwinds to last year, we can expect the market to decline at a very similar rate.”