Private new car sales slumped to a five-year low in September to cap off a horror six months for the industry, according to the latest industry figures released today by the Society of Motor Manufacturers and Traders (SMMT).
With September being the second-biggest month of the year for new car sales (behind March), there had been hope of a strong market performance. However, the 2017 market decline continued unabated, with diesel sales continuing to flounder.
The overall new car sales market fell by 9% compared to the same month last year, with just over 426,000 new cars being registered in September. In what is always a very big month for private sales (with private buyers traditionally being more interested in the new number plate changes than fleet and business purchasers), private sales were 9% off 2016 numbers and fleet sales were also 10% down.
Despite most manufacturers launching scrappage schemes and/or finance offers largely aimed at boosting diesel sales, it was yet another disastrous month for diesels with registrations falling by 22% compared to September 2016. Diesel’s market share remains at last month’s 40%, compared to more than 47% at this time last year, and this trend can be expected to continue for the rest of the year.
After a strong opening quarter (helped by concerns about road tax increases), the new car market has plunged more 132,000 units over the last six months compared to the same period last year. Used car results for the year to date have remained strong. The next update won’t be until some time next month, and these results will be key to determining whether customers are turning from new cars to used cars, or if they are simply choosing not to buy cars at all.
The SMMT comments accompanying the monthly report were somewhat curious; CEO Mike Hawes used clairvoyance to state that “consumers should be reassured that all the new diesel and petrol models on the market will not face any bans or additional charges”, when clearly local or national governments could announce measures at any time to charge or ban petrol or diesel cars from certain high-pollution zones.
Hawes also suggested that everyone should keep buying new cars because “fleet renewal is the best way to address environmental issues in our towns and cities”, which rather contrasts with most environmental experts who suggest that it would be better if we all caught buses or rode bicycles rather than driving cars in urban environments.
Hybrids still powering up
Once again, the only bright spot on the horizon is the continued growth in “alternatively-fuelled vehicles” (hybrids and electric cars, essentially). More of these have been registered in the first nine months of 2017 than in all of 2016.
Market share for AFVs remains above 5%, with a performance in September 41% better than last year. While this is obviously good news, it still represents a small percentage of the overall market – to put it in perspective, diesel and petrol market losses were eight times greater than AFV gains. Hybrid gains will continue to increase as virtually every manufacturer rolls out plans to electrify their cars, but in order to hit the government’s 2040 plans for all new cars to be electrified, the rate of growth will need to increase much faster than at present.
Qashqai rises to the top
There was quite a bit of change in the market top ten this month, with the Nissan Qashqai vaulting to the top of the charts ahead of last month’s top-selling Volkswagen Golf and the Ford Fiesta. Having bounced from nowhere into the top three last month, the Vauxhall Mokka X fell straight back out again in September.
There was further mixing of the top ten, as the Ford Kuga and Kia Sportage fell out but the Mercedes-Benz A-Class and C-Class models both re-appeared, along with the MINI hatch.
With August being one of the slowest months of the year, and September immediately following as one of the busiest, the top ten is often mixed up by manufacturers pushing different models with different offers.
Year-to-date, the Ford Fiesta remains on top, ahead of its bigger sister the Ford Focus, which in turn is fractionally ahead of the Volkswagen Golf. Looking beyond the top ten individual models, it’s been a good year for brands like Infiniti, Abarth and SEAT, while brands like Fiat, Jeep, SsangYong and Vauxhall are well behind last year’s results so far.
The last three months of the year could see more change in the rankings as end-of-year offers ramp up and dealers desperately try to shift stock, so we’ll be watching closely.
The Car Expert says – it’s a buyer’s market
After a strong opening quarter (helped by concerns about road tax increases), the new car market has plunged more 132,000 units over the last six months compared to the same period last year. April, May and June could use the road tax changes and the election as excuses, but the slump has continued over the last three months as well.
This means that, all over the country, car dealers will have unsold vehicles piling up around their ears and will be falling behind their sales targets. They are going to be desperate to do deals.
We have been covering the numerous new car offers and scrappage schemes that have been announced in recent weeks, but it is very likely that canny buyers will be able to secure even greater discounts on models that are underperforming against manufacturers’ expectations. There are huge savings to be had on many diesel cars, although falling residual values are tending to cancel out much of the up-front savings – therefore monthly finance payments are not dropping as much as you might expect.
It’s definitely time to haggle hard to get the best deal, and be brave enough to walk away if you’re not getting what you want. Another dealer may well be more agreeable to meeting your needs. There will be plenty of offers around between now and the end of the year, so don’t be rushed into anything that’s not exactly what you want.
