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Fleet demand stable in October as private buyer confidence wanes

The UK new car market fell 6.7% in October; hit by declining private buyer confidence although fleet demand remained stable and full electric registrations soared.

UK new car registrations fell 6.7% in October, as consumer confidence remains weak

The main cause of the downturn was falling demand from private consumers, with SMMT data showing registrations down 13.2%. Sub-25 ‘Business’ demand also fell – registering a 30.3% decline – while fleet registrations remained stable at +0.3%.

It’s a similar picture for the year to date, with the overall market down 2.9%; the result of a 3.2% decline in private registrations and a 37.1% decline in the business sector. Meanwhile the fleet market again remained steady, with a 0.1% uplift.

More positive news was seen in the breakdown of registrations by powertrain type, which saw alternatively fuelled vehicles reach a record 9.9% market share, with 14,231 registered in October. Registrations of full electric vehicles jumped 151.8% to 3,162 units – compared to 1,256 in October 2018 – while hybrid demand was up 28.9% to 7,950 units. However, plug-in hybrids continued to fall, down 1.7%. Diesel registrations also remained in freefall, down 28.3% to 34,666 units – and accounting for less than a third of the market (31.5%) while petrols also fell, recording a 3.2% downturn.

For the year to date, diesel is down 21.2% and now holds a 31.7% market share while petrols are up 2.2%. Full electric car registrations have risen 125.1% and hybrids are up 16.5% but plug-in hybrids are down 26.7%.

Commenting on the figures, Mike Hawes, SMMT chief executive, said: “The growth in alternatively fuelled cars is very welcome, showing increasing buyer appetite for these new technologies. The overall market remains tough, however, with October now the year’s eighth month of decline and in need of an injection of confidence. Whether the general election delivers a ‘bounce’ to the economy remains to be seen, but with attractive deals and an ever-greater choice of low, ultra-low and zero-emission models arriving in the UK’s showrooms, consumers have every incentive to consider buying a new car.”

Ian Plummer, commercial director at Auto Trader, also commented on the figures, saying: “Consumer confidence in the economy fell to its joint-lowest point in six years last month and historically, there’s always been a clear correlation between the two given the value of the purchase. This is particularly true for retail consumers and it’s also where we’ve seen the biggest decline in October.

“Brexit is the driving force of this lack in confidence, with continued uncertainty around our exit from the EU. The upcoming General Election will continue to cause further uncertainty around consumer purchase intentions. There are at least benefits to it taking place in December though, with it being a traditionally slow month for new car sales. Once we have a clearer understanding of what our exit from the EU looks like we should start to see consumer confidence improve and with it more stable new car sales.

And Alex Buttle, director of car selling comparison website Motorway.co.uk, added: “The UK car industry will surely look back at 2019 as one of its gloomiest on record. It’s unlikely new car sales are going to pick-up materially before the end of the year, with consumers also now having a general election to get their heads around.

“All the market can hope for is that the perceived disaster of a No Deal has been averted.

“Amongst the wreckage of 31 consecutive months of falling diesel sales, and petrol registrations down 3.2% in October, there’s at least some positives to cling onto, with sales of electric cars showing real resilience, even in the face of stiff consumer confidence and political headwinds.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. Natalie edits all the Fleet World websites and newsletters, and loves to hear about any latest industry news.