BEV surge unable to offset slow sales

The UK new car market declined in 2019, with annual registrations falling for the third consecutive year.

The Society of Motor Manufacturers and Traders (SMMT) has reported that 2,311,140 units were registered last year, representing a 2.4 per cent decline on the previous year.

The annual decline was driven primarily by falling private demand, with registrations from consumers down 3.2 per cent, while the small volume business market also fell 34.4 per cent.

Fleet registrations, meanwhile, remained broadly stable, up 0.8 per cent. Demand fell across nearly all vehicle segments, with only the dual purpose and specialist sports categories experiencing growth, up 12 per cent and 19.2 per cent respectively. Despite registrations of superminis and lower medium cars falling, these smaller vehicles remain the most popular – with a combined 57.1 per cent market share.

Bucking the overall trend, combined alternatively fuelled vehicle (AFV) registrations surged in 2019 to take a record 7.4 per cent market share. Hybrid electric vehicles (HEVs) continued to dominate this sector, with registrations increasing 17.1 per cent to 97,850 units. Battery electric vehicle (BEV) registrations experienced the biggest percentage growth, rising 144.0 per cent to 37,850 units and overtaking plug-in hybrids for the first time.

While the huge increase in BEV demand is welcome, their 1.6 per cent market share is still tiny and underlines the progress needed to reach the 50-70 per cent share the government envisages in the next 10 years. This ambition has not been helped by the significant decline of zero emission-capable plug-in hybrids, down 17.8 per cent – further evidence of the consequences of prematurely removing upfront purchase incentives before the market is ready.

The figures come as SMMT publishes data showing the UK new car fleet average CO2 rose for a third successive year, by 2.7 per cent to 127.9g/km. Massive investment by manufacturers into advanced powertrains, lightweight materials and aerodynamics means new cars are ever more efficient, with new cars emitting, on average, some 29.3 per cent less CO2 than models produced in 2000. However, this could not offset the overall rise which was due primarily to the effect of the more stringent WLTP test of new models, which generally ascribes a higher CO2 value than the older NEDC test to the same model, as well as some segment shifts and the decline in diesel.

December ended a turbulent year on a positive, however, with the market up 3.4 per cent. Fuel type demand mirrored that seen throughout the year, with diesel declining 19 per cent and petrol rising 2.6 per cent. Battery electric vehicles saw another huge increase in the last month of the year, up 220.7 per cent, while PHEV registrations grew for only the fourth month this year, up 21.8 per cent.

Mike Hawes, SMMT chief executive, said: “A third year of decline for the UK new car market is a significant concern for industry and the wider economy. Political and economic uncertainty, and confusing messages on clean air zones have taken their toll on buyer confidence, with demand for new cars at a six-year low.

“A stalling market will hinder industry’s ability to meet stringent new CO2 targets and, importantly, undermine wider environmental goals. We urgently need more supportive policies: investment in infrastructure; broader measures to encourage uptake of the latest, low and zero emission cars; and long term purchase incentives to put the UK at the forefront of this technological shift. Industry is playing its part with a raft of exciting new models in 2020 and compelling offers but consumers will only respond if economic confidence is strong and the technology affordable.”