New car registrations fell by just under 3% in February, according to results published this morning by the Society of Motor Manufacturers and Traders (SMMT). However, it’s not a particularly drastic state of affairs – February is traditionally one of the two quietest months of the year, and the difference between this year and last is less is only about 2,300 cars.
The fall is also significantly less than last month’s results, which saw new car registrations down by 6% year-on-year. The drop was evenly spread across private and fleet new car registrations, although business registrations (the smallest sector) fell more sharply – but again, this only means about 700 units in February.
Within those numbers, however, the story largely follows the same pattern as the last 12 months. Diesel sales continue to nosedive, with petrol sales picking up the slack. Alternatively-fuelled vehicles (basically hybrids and EVs) were also slightly weaker than expected despite a slight increase compared to last year. Petrol cars commanded more than 60% of the new car market, while AFVs were at 4.4% – better than last year, but below the 5% mark that we have come to expect over the last year.
Diesel sales continuing to plummet
This time last year, the tide had started to turn against diesels, with sales in Feb 2017 some 9% down on Feb 2016. AS we all know, this accelerated through 2017 and has continued into 2018. In February 2018, diesel registrations were more than 23% down on the same month in 2017, meaning a drop of about 30% in the last two years. Diesel’s share of the market is now down below 36%, compared to 45% last year and nearly 49% two years ago.
Both private and fleet buyers continue to ignore the increasingly desperate pro-diesel propaganda being pushed by the SMMT and other industry mouthpieces. As we have previously predicted, it looks like diesel sales will continue to fall in coming months, probably settling at about 30% market share.
This is absolutely not a UK phenomenon, despite the rhetoric from those with vested interests. All across Europe, diesel sales are falling at similar rates as car buyers and governments continue to move away from diesel power. In the short term, this has meant a revival for petrol cars, but will inevitably lead to rapid growth in hybrids and electric vehicles as soon as car companies can bring them to market.
What can we expect from March numbers?
March is traditionally the biggest month of the year for new car registrations, as new number plates arrive and many private and fleet buyers rush to buy new cars with the latest numbers. However, we need to remember that last March was an all-time record as buyers rushed to beat major road tax changes that came into effect in April 2017.
This March represents the best chance for diesel cars to show some sign of temporary recovery, as road tax for virtually all new diesel cars will increase in April. Dealers and manufacturers will be hoping that fleets repeat last year’s decision to bring forward vehicle replacements to beat the road tax increase. However, unlike last year, the extra road tax burden is probably not sufficient to overcome depreciation costs from changing cars a few months earlier.
Private buyers, on the other hand, tend to react more strongly to tax-saving incentives, so maybe we will see a one-off boost to private diesel new car purchases in March.
Overall, it’s likely to be another month of negative headlines for March, but given that the first quarter of last year was a record period, we will really have to wait and see how the second quarter unfolds to really assess the state of the new car market.
Ford Fiesta reigns supreme once again
Looking at the monthly best-sellers list, it is no surprise to see the Ford Fiesta dominant as usual, with an enormous margin over the second-placed Volkswagen Golf. Keen run-out deals have helped the Ford Focus and Mercedes-Benz A-Class to third and fourth places respectively. The BMW 3 Series made an appearance in the Top Ten for the first time in a while, in ninth place and only 26 units behind the rival Mercedes-Benz C-Class in eighth.