CEO Update

A missed opportunity to boost new car sales

02 November 2018 #CEO Update

This week’s Budget was carefully scheduled to avoid a Halloween clash but for our sector, as the headline writers pointed out, it still turned out to be more trick than treat. While some of the Chancellor’s announcements were welcome – particularly further funding for the government’s industrial strategy and its Stephenson Challenge – we were looking for measures that would boost uptake of the latest, low emission cars.

In recent weeks we have already seen a cut in purchase incentives for fully electric and plug-in hybrid electric vehicles so the upcoming review into the impact of WLTP on Vehicle Excise Duty and company car tax must ensure that motorists buying the latest, cleanest cars won’t be unfairly penalised. The objective should be policy that promotes stability and encourages consumers to buy the most environmentally friendly vehicles, whatever the technology and whatever the segment technology.

Keeping older vehicles on the road for longer, as the current system does, undermines environmental, industrial and economic objectives. We look forward to working with government on its WLTP review, and will continue to make the case for a consistent long-term strategy to avoid further confusion and market distortion.

New car registration figures for October are out on Monday and it will be interesting to see how sales are doing following nine months of heavy turbulence. It also means we’ve reached November, widely viewed as the crunch month for a Brexit deal that will leave enough time for any agreement to get through legislatures on both sides of the Channel.

In a meeting SMMT held this week with ministers from the Department for Transport and the Department for Exiting the European Union, it was made clear that the government remains confident of reaching a deal within weeks. But every week without settlement means prolonged uncertainty and cost for the automotive industry.

The real priority in the delicate talks should be securing an agreement that safeguards the future of a sector built around frictionless trade across European borders. A deal that does this is the treat we so badly need.