Electric and finance key to offsetting WLTP market impact
"As many predicted, the full impact of August’s false economy was deeply felt last month as the Worldwide Harmonised Light Vehicles Test (WLTP) regulations took effect” said Ian Plummer, Auto Trader director.
September’s performance was a matter of basic economics; there simply weren’t enough cars on forecourts that met the new WLTP standards for retailers to sell. However, there were some brands that were better prepared than others. Whilst the Volkswagen group brands struggled, other German prestige marques, such as Mercedes and BMW, performed much better and seem to have better anticipated the production of WLTP compliant cars in advance of the new regulations. For volume brands, Mitsubishi also had a very strong month, and as a result is joining SEAT as one of this year’s fastest growing brands.
“2018 has been very challenging for both retailers and manufacturers, with the fuel debate and Brexit anxieties denting consumer confidence, and inflationary pressure on exchange rates, hitting profits. Coupled with changes to Vehicle Excise Duty and the introduction of WLTP disrupting the typical seasonal trends, it’s also been a very difficult year to predict. There’s reasonable optimism that the arrival of new WLTP stock in the UK over Q4 should allow retailers to catch back some of September’s lost sales and finish 2018 on a positive note hitting monthly numbers which should exceed prior year.
“Despite the many economic uncertainties, there is some positive news on the horizon for 2019 too. The plethora of new electric and hybrid vehicles that are on display at this week’s Paris Motor Show are not far from hitting forecourts, giving consumers some great new choices in this emerging fuel type which grew again last month, with most manufacturers selling through all their AFV stocks with relative ease. Along with the continued trend towards crossovers and SUVs, which have been driving both the new and used car markets in recent months, they’ll provide the opportunity for manufacturers to offset the recent sales’ deficits.
“What’s more, as more consumers move away from traditional ownership to usership models, the appetite for finance remains exceptionally strong, particularly with the continued power of PCP allied with the growing emergence of Personal Contract Hire (PCH) deals. Leasing and subscription models are beginning to open up the market and have the potential to unlock market growth, as they make accessing a car an easier and more financially attractive option to a wider demographic of consumers.”