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Sluggish fleet demand contributes to new car sales fall

Date: 04 September 2020   |   Author: Sean Keywood

UK new car registrations were down by 5.8% year-on-year in August, according to the Society of Motor Manufacturers and Traders (SMMT).

In what is traditionally the quietest month of the year for new car sales, ahead of the new number plate change in September, fleet sales were down by 5.5%, lagging behind the private market, which only saw a 1.7% fall.

There was also a big drop in business sales, classed as to firms with fewer than 25 vehicles, which dropped by 57.9%, although these make up only 1.7% of the overall market.

The month saw another big increase in sales of electrified cars, with the largest jump seen in demand for mild hybrid petrols, which were up by 303.5% to take a 7.5% share of the overall market, reflecting the rapid rollout of this technology on new models this year.

It was also a strong month of growth for plug-in hybrids, which were up by 221.1% to take a 3.3% overall market share, and mild hybrid diesels, which rose by 118.4% for a 3.4% market share.

Pure electric vehicles were up by 77.6% to take a 6.4% overall market share, while conventional hybrids, up by 38.2%, were also at 6.4%.

The diesel car decline shows no signs of ending, with registrations down by 39.5% to give the fuel just a 16.4% share of the overall market, while petrol cars were also down, by 14.7%, though they still took a 56.6% market share and the growth in mild hybrids will have had some impact here.

The overall market for the year to date, following the impact of coronavirus lockdown, remains 39.7% down on 2019.

Discussing the August figures, SMMT chief executive Mike Hawes said: "The decline is disappointing, following some brief optimism in July. However, given August is typically one the new car market's quietest months, it's important not to draw too many conclusions from these figures alone. 

"With the all-important plate change month just around the corner, September is likely to provide a better barometer. 

"As the nation takes steps to return to normality, protecting consumer confidence will be critical to driving a recovery."

Giving his reaction to the figures, Lex Autolease head of consultancy Ashley Barnett also cited the traditional August sales drop.

He said: "August is traditionally a weaker month for new car registrations as many drivers await the new number plate release in September and this year is no exception. 

"As showrooms enter their fourth month of trading since the lockdown, it appears that consumer spending has been diverted elsewhere as restrictions continue to ease.

"The coronavirus outbreak has proven extremely challenging for the new car market and it's still too soon to tell how long the repercussions will last."

Despite the challenges, Barnett said the figures for EVs were encouraging.

He said: "The ongoing effects of lockdown - including a shift towards more flexible working patterns, fewer commutes and a general reduction in business mileage - means more road users are now in situations where EVs are appropriate and practical. Although, we shouldn't lose sight of the fact that EVs still only account for 0.27% of total cars on the UK's roads.

"To make sure we keep up momentum, continued fiscal support and on-road perks are needed to increase the rate of adoption in line with the country's Road to Zero targets."