CEO Update

Market needs confidence to commit to new cars and vans

08 November 2019 #CEO Update

This week’s new car registration figures were another sobering reminder that consumer confidence in the UK remains weak. The overall market remains tough, with October representing the eighth month of decline in 2019 as passenger car numbers dropped -6.7% on October 2018 resulting in a -2.9% decline for the year to date.

The -13.2% drop among private buyers, with fleet sales remaining stable, highlighted buyer hesitance fuelled by anaemic economic growth, Brexit and continued uncertainty over diesel and clean air zones – the latter not helped by patchwork decision-making at local government level, the most recent of which is Bristol.

Plans announced by the city’s council this week will see all diesel cars banned from the city, a draconian move that goes against government guidelines and fails to distinguish between modern vehicles and decades-old technologies. Such decisions will only cause confusion for drivers and undermine efforts to boost air quality.

Despite this, the 10% market share of alternatively fuelled vehicles in the month was a welcome high spot, showing that there is appetite among motorists for the latest ultra low emission technologies which will help address air quality issues if we can get them on to the roads in significant numbers and, importantly, older vehicles off the roads quickly.

A second consecutive month of decline in new van registrations shows things are equally gloomy in the commercial vehicle sector after a strong start to the year. Restoring economic stability to the UK and giving confidence to businesses and private buyers alike needs to be a priority for any new political administration.

We’re now being pitched into the middle of an election campaign – whether there’s an economic boost on the other side of this voting period remains to be seen, but what is most urgently needed is greater economic and consumer confidence. Resolving Brexit is part of that, but the election alone won’t achieve it – we have months, if not years, of further trade negotiations ahead of us. In the meantime, parties hoping to form the next government can demonstrate continued support for our vital sector with broader policies – fiscal and otherwise – that would improve our competitiveness throughout the current uncertainty.

Next week we are looking forward to holding our Regional Forum event, which takes place on Tuesday 12 November in Luton. There will be a number of speakers from SMMT and elsewhere, including Vauxhall’s Plant Launch Manager, Craig Jones, who will share from the company’s experience of building commercial vehicles in the area.

We will also be sharing the latest on what recent Brexit developments mean for the industry, with opportunity for questions and discussion. There is still the opportunity for SMMT members to come along to the event – get in touch with our membership team if you would like to attend.