The latest figures from the Society of Motor Manufacturers & Traders (SMMT) have revealed mixed results, with overall sales dipping again but sales of electric and hybrid cars on the rise.
After a long spell of growth in new car sales, recent months have seen a decline, sparked largely by a decrease in sales of diesel-powered cars.
New registrations in October came in at 153,599, around 3% lower than the same month in 2017. This also means that the number of new cars registered in the first 10 months of this year is down over 7% when compared to the number of new cars registered in the first ten months of last year, according to the SMMT.
How long before pure electric and hybrid cars overtake diesel?
It seems that government policy of higher taxation on diesels and the threat of additional charges for driving diesel cars in cities – to cite just two factors – has had a big impact on new diesel sales, which have fallen to account for just one-third of new sales. It wasn’t very long ago that diesels accounted for 50% of the new car market.
The rise in electric and hybrid car sales has seen this combined category now take 7% of the market. However, while the number of pure electric plug-in cars has increased by 87% since last year, it still only accounts for less than 0.5% of the market, with 584 vehicles sold.
What does this mean for motor traders?
There are some things for motor traders to consider here. Firstly, according to Auto Express, model changes and testing backlogs have caused supply shortages for manufacturers, which will have inevitably had some impact on new car sales.
Secondly, it is likely that many recent sales of alternatively fuelled vehicles (and especially plug-in electric cars) have been due to the government removing incentives to buy these vehicles, ending the £2,500 taxpayer grant for plug-in hybrid buyers and cutting the subsidy for buyers of new electric cars from £4,500 to £3,500 in November.
In a nutshell, this could mean that electric and hybrid sales received a bit of an artificial boost in October as customers rushed to buy them while they could still take advantage of the government deals on offer, while sales of petrol and diesel cars may have been impacted by supply shortages.
Clearly, while sales of new electric and hybrid cars continue to rise and diesel sales are on the wane, the predominantly popular new car is still powered by petrol. As new car reliability continues to improve, it is likely to be many years from now before combustion engine cars disappear from our roads.
The used car market – and service and repair garages – should continue to see a majority of petrol and diesel vehicles for the next few years at least. And there should be a good supply of them, too, with increased sales in recent years and longer-lasting cars ensuring what traders might miss out on in terms of new sales could possibly be made up from used car sales instead.
Nonetheless, with hybrid vehicles such as the Toyota Prius and Lexus RX 400h now over a decade old, electric vehicles will most likely be the next vehicles to filter through to new and used markets on a wider scale. The questions from new and used buyers in future are less likely to be “how many miles does it do to the gallon?” and more “what is the range between charges?” and “how long will the battery last?”
ChoiceQuote – with motor traders all the way
ChoiceQuote will continue to keep an eye on new and used vehicle sales to keep you up-to-date with the latest developments, ensuring our motor trade insurance customers are aware of how changes to the market might affect you.
Whatever you do in the motor trade, ChoiceQuote will make sure that the insurance we offer provides the best protection to meet your needs. If you have any questions about motor trade insurance policies, we’re the experts! Call us on 01625 885046 to speak to one of our friendly advisers.