CEO Update

Reality bites as short-term policy making sets automotive back

08 February 2019 #CEO Update

January new car registration figures were released this week but, just as one swallow doesn’t make a summer, so we’re going to have to wait a little longer to see how the 2019 market performs.

The first month of the year can often be topsy-turvy: much depends on how the previous year ended and the level of consumer confidence taken into the New Year. That said, it’s encouraging that the month was broadly on par with the same time last year (-1.6%) as New Year deals attracted buyers into showrooms.

Other patterns continued – 161,013 new cars were registered for use on UK roads, with fuel choice trends seen last year continuing in the first month of 2019. Diesel demand was down -20.3%, with petrol and AFV rising 7.3% and 26.3% respectively.

When you look at the individual breakdowns of alternatively fuelled vehicle registrations it’s no surprise to see PHEVs down -15.6% year-on-year following the government’s baffling decision to restrict the plug-in grant for new cars to battery electric vehicles and reducing it in the process. This sends entirely the wrong message to consumers, and is at odds with our shared vision to increase the take-up of these new technologies.

While there was a 110% increase in BEV registrations compared with January 2017, and strong hybrid demand, the total AFV market was still less than 7%. Industry is doing its bit – with more than 30 plug-in electric models scheduled to arrive on the market this year, consumers will have more choice than ever in 2019 when it comes to the latest high-tech, low-emission powertrains – but we remain short of government and industry ambitions.

What’s needed are the right incentives, fiscal and otherwise, and an improved national charging infrastructure to make AFV market share climb higher. Manufacturers have invested heavily in zero-emission technology, which remains at a formative stage in the market, and it’s important that political ambition and reality go hand in hand.

Above all, any such interventions from policymakers need to be made carefully and sensitively – recent times have shown how anti-diesel rhetoric can dent consumer confidence and affect the entire industry – and environmental goals – in a material way. Brexit too is a clear demonstration that without prioritisation from government and unity among politicians, industry’s progress will be set back.

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