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Fleet registrations drop as UK new car market declines

Date: 05 November 2020   |   Author: Sean Keywood

UK new car market registrations fell by 1.6% year-on-year in October, with fleet sales lagging behind private buyers.

Data from the Society of Motor Manufacturers and Traders (SMMT) shows that fleet registrations were down by 3.3%, while private registrations increased by 0.4%.

Business registrations, to fleets of fewer than 25 vehicles, were up by 4%.

The SMMT says the statistics are flattered by a weak October 2019, when vehicle supply issues and Brexit concerns saw private registrations fall by 13.1%.

The figures for last month made it the weakest October since 2011, and 10.1% lower than the average over the last decade.

The SMMT says a major factor in last month's figures was the 'firebreak' lockdown in Wales, to which it attributes more than half of the overall UK decline.

With a new lockdown starting today in England, the SMMT says that while it is encouraged that 'click and collect' sales and deliveries are allowed to continue, these cannot make up for closed showrooms.

It has therefore downgraded its whole-year forecast to 1.56 million registrations, which would make 2020 the weakest year since 1982.

SMMT chief executive Mike Hawes said: "When showrooms shut, demand drops, so there is a real danger that with England today entering a second lockdown, both dealers and manufacturers could face temporary closure. 

"What is not in doubt, however, is that the entire industry now faces an even tougher end to the year as businesses desperately try to manage resources, stock, production and cashflow in the penultimate month before the inevitable upheaval of Brexit. 

"Keeping showrooms open - some of the most Covid-secure retail environments around - would help cushion the blow but, more than ever, we need a tariff-free deal with the EU to provide some much-needed respite for an industry that is resilient but massively challenged."

The market fuel mix in October saw another big decline in diesel car sales, down by 38.4% year-on-year to take just a 14.9% market share, and there was also a steep drop for petrol, down by 21.3%, although still accounting for 49.5% of sales.

A factor in these continues to be the rapid introduction of mild hybrids by manufacturers, with mild hybrid petrol registrations up by 545.8% to take an 11.4% overall market share, and diesel mild hybrids up by 56.6% for a 4.3% share.

It was another strong month for pure electric sales, up by 195.2% for a 6.6% market share, and for plug-in hybrids, which were up by 148.7% to take 5.5% of the market.

Conventional hybrid registrations were up by 39%, taking 7.8% of the market. 

Reacting to the figures, Jon Lawes, managing director of leasing company Hitachi Capital Vehicle Solutions, said: "These nine-year low figures sadly come as no surprise considering the challenges created by economic lockdowns and Brexit, which has depressed both the market and consumer demand. 

"The one positive is that the demand for electric and hybrid vehicles continues to grow, up 143.9% compared to this time last year, despite the challenging circumstances. This long-term growth demonstrates to the industry and government that consumers and business see real alternatives to diesel and petrol vehicles.

"To keep this momentum in line with the growing number of electric and hybrid models coming to market, we are calling on the government to collaborate more effectively with our industry to develop the charging infrastructure which will adequately support, and accelerate the transition to EV's and crucially, provide both business and consumers with the confidence that EV's are operationally viable replacements."

Lex Autolease head of consultancy Ashley Barnett said: "We are seeing an increased interest in EVs among our customers as they begin to realise that alternative-fuelled vehicles can work for them. 

"Barriers to adoption including vehicle choice and range anxiety seem to be disappearing as drivers become more educated on the benefits of making the switch. The figures also suggest that the measures to reduce tax to 0% on zero-emission company cars for 20-21 have worked to incentivise drivers to make the transition now.

"However, it's important to understand that the total number of EVs on the UK's roads still only accounts for 5.5% of vehicles. Clearly, we've got a lot of ground to make up. 

"The government's plan to bring forward the ban on the sale of new petrol and diesel vehicles from 2040 to 2030 will no doubt accelerate adoption levels, although additional fiscal support for OEMs and end users is needed to deliver the Road to Zero strategy."