Commercial Director, Ian Plummer, provides his view on the latest new car registrations from the Society of Motor Manufacturers and Traders (SMMT)
While the figures show a 4.1% drop, these numbers don’t give a real representation of the market. The best way to describe it is, it’s like a calm swan on the surface but actually there’s been a furious amount of peddling by retailers and manufacturers just to get us here.
For one, the Real-world Driving Emissions (RDE) test deadline is in September which means vehicles that exceed emissions under the new rules can’t be sold as new cars after September. To help alleviate this, there has almost certainly been a high volume of stock which has been self-registered by retailers – and not actually sold to consumers. Although self-registrations are common practice to achieve retailer targets, dampened demand and these added stock pressures have made the task of reaching those targets even more of a battle than normal.
Brexit has a part to play too. The falling value of the pound either increases the imported prices of cars or directly reduces the profitability of around nine in 10 cars sold in the UK. So while retailers and manufacturers try to entice consumers with very strong offers, particularly to push out older stocks, these sales are increasing costly for them. Judging by the volatility of recent sales numbers, with some brands faring well but several others now well behind prior year, it’s clear that manufacturers face a decision about how sustainable such sales “push” can be in the longer term.
What now seems like a blip in AFV sales in June, the industry’s investment in electric vehicles is starting to reap the rewards now. While the availability and delivery lead times of some EVs is far from ideal on certain models, consumers’ appetite for these cars is high and registration figures are rising. However, we can’t rest on our laurels and must continue to incentivise and push these vehicles so that we can reach the ‘Road to Zero’ on time.
It’s clearly not all doom and gloom for the industry though. Despite the challenges thrown at UK car buyers, they remain resilient and still as keen to regularly renew their cars. It’s precisely this type of accelerated renewal of the car parc towards cleaner engines which is crucial to our chances of significantly improving air quality. More broadly, we know that overall consumer appetite remains strong, with 141 million searches taking place across our site last month alone, which compares to 134 million last year. Consumers in the UK are still looking for cars but they are getting savvier and looking for the best deal, particularly in this time of economic uncertainty.