Fleet Solutions - Fleet sales decline 7.3% in 2018

Fleet Solutions - Fleet sales decline 7.3% in 2018

7th Jan 2019

Fleet Sales Decline 7.3% in 2018 Mirroring Decline in Total Car Sales

Car sales to Fleets were down more than 7% in 2018, as the new car market suffered its worst performance since 2013.

Data from the SMMT showed that a total of 2.36 million cars were registered last year – 12% below the peak in 2016 and 6.8% less than in 2017.

Mike Hawes, chief executive of the SMMT, said the decline was the result of a number of factors including Brexit, WLTP and the continued uncertainty over diesel all impacting Fleet sales and Fleet Solutions.

“A second year of substantial decline is a major concern, as falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market.

“The industry is facing ever-tougher environmental targets against a backdrop of political and economic uncertainty that is weakening demand so these figures should act as a wake-up call for policy makers,” added Hawes.

While last year was described as “highly turbulent”, Hawes said the performance was broadly in line with forecasts and “probably in line with the average for the past 10 years”.

SMMT Data Snapshot

This year, the SMMT predicts a further decline of 2% in overall registrations – but the outcome of the Brexit deal is likely to big the biggest driver to market performance in 2019.

“The chancellor has spoken of a boost to the economy if a deal goes through. Without a deal it could be a different situation,” said Hawes.

The SMMT has a clear position that a “no deal” Brexit is not an option and it wants to ensure that there is a degree of continuity.

“Frictionless trade is what this industry depends on,” said Hawes. “Tariffs will push up the price of vehicles.”

Electric vehicle registrations could also be affected by the Brexit deal, as it is yet to be established how UK sales will contribute to manufacturer’s individual CO2 targets and whilst there is a lot of talk that Electric Vehicles could fill the Diesel sales gap it shoudl be noted that Alternatively Fuelled Vehicles (AFV) only made up 141,000 of the 2.367M Car slaes representing 6% of the total versus Diesels still 31.6%.

Hawes warned that manufacturers are unlikely to allocate large quantities of EV stock to the UK if those sales don’t count towards their targets.

Diesel Car Sales Down Almost 30%

The figures also show the UK new car fleet average CO2 rose for a second successive year, by 2.9% to 124.5g/km. This is despite huge investment by manufacturers to deliver ever more efficient cars, with the average new or updated model emitting -8.3% less CO2 than that it replaced, a natural consequence of the shift to petrol.

Diesels are, on average, 15-20% more efficient than petrol equivalents and so have a substantial role to play in addressing climate change, says the SMMT.

Hawes said: “Supportive, not punitive measures are needed to grow sales, because replacing older cars with new technologies, whether diesel, petrol, hybrid or plug-in, is good for the environment, the consumer, the industry and the exchequer.”

He believes that diesel sales could see a resurgence as consumers look to switch back from less efficient petrol models and the introduction of RDE2 standards provides a fiscal incentive.

Fleets Should Review Policies

As previously discussed with the turbulence in the Fleet Services industry Fleet's should be reviewing their Fleet policy on a regular basis to ensure their policy is optimised for their business needs, the decline in diesel sales is presenting opportunities for low cost leasing deals to Fleets which should be viewed in line with BIK data to deliver the best Fleet Solution.

About LetsTalkFleet

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