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Consumer confusion to blame for fall in new car registrations, says motor dealer

Consumer confusion is in part to blame for the UK's worst year for new car registrations since 2013, a Swindon motor dealer says.

Dominic Threlfall of Hyundai and Suzuki dealership Pebley Beach says the 'demonisation' of diesel cars and the confusion about hybrids and electric vehicles has left new car buyers unsure about their next purchase.

Last week trade association SMMT – the Society of Motor Manufacturers and Traders – released annual figures which showed a 2.4 percent decline in new car registrations during 2019 – from 2.36 million units to 2.31 million.

New car registrations climbed steadily from the recession until 2016, when they began to decline again. Since then, sales have fallen for three consecutive years. 

The annual decline was driven primarily by a fall in private demand with registrations from consumers down 3.2 percent, while the small volume business market also fell, down 34.4. Fleet registrations, meanwhile, remained broadly stable, up 0.8 percent. 

"Drill into the figures," said Dom, "and you can see the diesel market took the biggest hit – with registrations dropping by more than 21 percent. A two percent increase in the registration of petrol cars was not enough to make up the shortfall.

"What's interesting is that we have customers expressing concern about buying another diesel car. They're viewed as major polluters, but actually it depends what kind of driving you're doing. 

"Diesels offer far better fuel economy and are much lower carbon emitters than petrol cars – good for the fight against climate change – but the particulate emissions make them less attractive for city centre driving.

"Volkswagen's Dieselgate scandal in 2015 did real damage to the whole sector. The popularity of diesel had grown throughout the 2000s to account for half of the UK car market. Now drivers feel betrayed and confused, and are backing away from diesel engines."

Private buyers, said Dom, might also be delaying purchases to see how the hybrid and electric markets develop, while the waiting list for EVs and some hybrids is also hitting sales figures. 

The good news is that alternatively fuelled vehicles are proving more popular, albeit from a lower base, taking a record 7.4 percent of the UK market share. 

"Hybrid electric vehicles continue to dominate the sector, with registrations increasing 17.1 percent to 97,850 units, while battery electric vehicle (BEV) registrations experienced the biggest percentage growth, rising 144.0 percent to 37,850 units and overtaking plug-in hybrids for the first time.

For Dom's customers, the choice of alternatively fuelled vehicles continues to grow. Hyundai already offer an all-electric mini SUV – the Kona – and three variants of the Ioniq, including an all-electric version and two hybrids, as well as the Nexo – one of the only hydrogen-powered cars available to UK motorists.

Meanwhile, Suzuki aims to have a hybrid version of every model of its range on forecourts by the end of 2020 – making it only the second manufacturer to reach this milestone.

"With diesel, petrol, electric, and different hybrid options the choice for motorists can be daunting," said Dom. 

"The best thing a customer can do is come in and talk to one of our consultants. We'll look at different factors including how far the owner wants to drive every day, their driving conditions – town centre or motorway – and how long they want to keep the car. We can then advise on the very best choice for their needs. 

"One of the reasons we invested in becoming Swindon's first EV Approved dealer – and still one of only two in the town – was to demonstrate our commitment to giving best advice on the correct vehicle power train."

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Financial Disclosure

Pebley Beach Limited is an Appointed Representative of Automotive Compliance Ltd, who is authorised and regulated by the Financial Conduct Authority (FCA No 497010). Automotive Compliance Ltd’s permissions as a Principal Firm allows Pebley Beach Limited to act as a credit broker, not as a lender, for the introduction to a limited number of lenders.

We can introduce you to a selected panel of lenders, which includes manufacturer lenders linked directly to the franchises that we represent. An introduction to a lender does not amount to independent financial advice and we act as their agent for this introduction. Our approach is to introduce you first to the manufacturer lender linked directly to the particular franchise you are purchasing your vehicle from, who are usually able to offer the best available package for you, taking into account both interest rates and other contributions. If they are unable to make you an offer of finance, we then seek to introduce you to whichever of the other lenders on our panel is able to make the next best offer of finance for you. Our aim is to secure the best deal you are eligible for from our panel of lenders. Lenders may pay a fixed commission to us for introducing you to them, calculated by reference to the vehicle model or amount you borrow. Different lenders may pay different commissions for such introductions, and manufacturer lenders linked directly to the franchises that we represent may also provide preferential rates to us for the funding of our vehicle stock and also provide financial support for our training and marketing. But any such amounts they and other lenders pay us will not affect the amounts you pay under your finance agreement, all of which are set by the lender concerned. If you ask us what the amount of commission is, we will tell you in good time before the Finance agreement is executed. All finance applications are subject to status, terms and conditions apply, UK residents only, 18’s or over. Guarantees may be required.

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