CEO Update

Petrol and diesel critical on road to low carbon future.

18 May 2018 #CEO Update

Figures released this week by SMMT show how trends in the new car market play out in the used sector. In particular, the ongoing surge in demand for new, alternatively fuelled vehicles, including zero-emission and plug-in hybrid models, inevitably means more of these innovative cars become available second hand – and buyers are taking advantage.

Yet, while demand for used, pure electric cars rose 33.8% to 2,927 units in the first quarter, the biggest increase of any fuel type, they still represent a fraction of the more than 2 million transactions made since January.

To put this into context, conventional petrol and diesel cars combined took 98.7% market share of all used cars sold in Q1, and diesel sales enjoyed a 2.0% uplift to a total of 868,815. Furthermore, 98% of all new cars sold are either petrol or diesel. Industry shares the vision of a future with zero emission transport, but there is no doubt that the internal combustion engine has a role to play on the journey.

The automotive sector has funded significant research and development to bring a growing range of alternatively fuelled and electrified technologies to market. Yet, at the same time it has invested billions to make cleaner petrol and diesel vehicles, and getting more of these on the roads replacing the older ones is crucial to cleaning up our air.

So it was encouraging to hear the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, agree with this position on Tuesday at the FT Future of the Car Summit. “New generation diesel can make a big contribution to reducing emissions,” he said and the latest Euro 6 diesel engines, many made right here in Britain for export around the world, can make a difference in lowering our carbon dioxide emissions while at the same time improving air quality.

We have a close working partnership with our government both directly and via the Automotive Council, which has helped create a bespoke sector deal as part of the new and ambitious Industrial Strategy. This will help ensure the UK is well placed to become a centre of excellence for the development and roll-out of the next and future generations of low and zero emission, connected and autonomous vehicles (CAVs). Indeed, the government’s commitment to CAVs was demonstrated again on Wednesday with the announcement of new laws paving the way for remote control parking; something that will be very beneficial to those with restricted mobility and those with big cars and small garages!

What’s needed now is the right political and economic environment to ensure consumers and businesses have the confidence to invest in a new vehicle – one that is right for their circumstances and driving needs. As the Secretary of State said, “there’s a place for diesel vehicles and there will be for some time to come”.

Mike Hawes, SMMT Chief Executive