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Fleets and AFVs provide bright spots as overall new car market falls

UK new car registrations fell 1.3% in November, despite an increase in fleet registrations and record demand for alternatively fuelled vehicles (AFVs).

Fleet registrations were up 2.8% in November

The latest figures from the Society of Motor Manufacturers and Traders (SMMT) show a total of 156,621 models were registered in November; some 2,000 units fewer than the same month last year as economic uncertainty and confusion over diesel and clean air zones hit demand.

Positive news came from fleet registrations, which were up 2.8% to take a 55.5% share of the market (53.3% in November 2018), showing the importance of the sector. However, sub-25 ‘business’ registrations fell 3.2% and private demand was down 6.1%.

Diesel uptake continued to tumble; the 27.2% fall in diesel registrations last month means the fuel type has just a 23.6% market share now. Petrol registrations were up 2.0% to a 62.2% market share but the major news was in AFV registrations, which reached a record market share of 10.2% – equivalent to 16,052 cars.

Within the AFV sector, battery electric car registrations surged by 228.8%, with 4,652 registered – giving a 3.0% market share compared to 0.9% in November 2018. Meanwhile the markets for plug-in hybrids and hybrids also rose by 34.8% and 15.0% respectively.

Year-to-date figures show the overall UK new car market is down 2.7%, with 2.2 million cars registered, in line with current industry forecasts. Fleet remains steady, up 0.3% and accounting for 52.9% of the market (51.3% for the first 11 months of 2018) while business registrations plummeted 35.3% and private demand dropped 3.4%.

Mike Hawes, SMMT chief executive, said: “These are challenging times for the UK new car market, with another fall in November reflecting the current climate of uncertainty. It’s good news, however, to see registrations of electrified cars surging again, and 2020 will see manufacturers introduce plenty of new, exciting models to give buyers even more choice. Nevertheless, there is still a long way to go for these vehicles to become mainstream and, to grow uptake further, we need fiscal incentives, investment in charging infrastructure and a more confident consumer.”

Jon Lawes, managing director, Hitachi Capital Vehicle Solutions, added: “With alternatively fuelled vehicles now making up over 10% of new registrations, this could be a real tipping point for the industry. The latest figures prove that consumers are becoming increasingly confident in the options that electric vehicle manufacturers are providing, and this is backed up by our recent research, with 62% of consumers supporting the move towards electric vehicles. And we expect this to increase as we see more models entering the market next year, with manufacturers continuing to remove barriers to adoption.

“The challenge now is for our future Government to ensure that we have the infrastructure in place to support this transition, providing a clear roadmap of investment to give confidence to consumers and business.”

Michael Woodward, UK automotive lead, Deloitte, also welcomed the BEV growth but said further action is needed. He explained: “Demand for BEVs is also expected to accelerate when 0% company car tax rates on zero-emission vehicles are likely introduced in April 2020. However, this level of growth presents a number of challenges as we enter a new decade. Not only is significant investment required in the UKs charging infrastructure, but as BEVs continue to grow, the long-term implications for tax revenues are unclear.”

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 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. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.