New car sales plunge despite green vehicles grabbing record market share

Sales of electric and plug-in hybrids have been gaining momentum. Picture: Jon Savage

Some 11,700 fewer cars were registered across the UK in January, compared with the same month in 2019, after a 7.3 per cent slide in sales.

Releasing its latest data, the Society of Motor Manufacturers and Traders (SMMT) blamed confusion over diesel and clean air zones, along with weak consumer and business confidence.

The decline was driven by a 13.9 per cent year-on-year drop in demand from private consumers. Sales of diesel and petrol models were down by 36 per cent and 9.5 per cent respectively.

Alternatively-fuelled vehicles (AFVs) achieved a record market share of 11.9 per cent in January, up from 6.8 per cent in the same month last year. This included demand for plug-in hybrids more than doubling, and triple the number of pure electric cars leaving showrooms compared with January 2019.

On Tuesday, Prime Minister Boris Johnson outlined proposals to bring forward a ban on the sale of new petrol and diesel cars by five years to 2035. He also added hybrid cars to the plans.

Unsettling

SMMT chief executive Mike Hawes said: “The new car market is a key driver of the UK’s overall economy, so another month of decline is unsettling.

“Consumer confidence is not returning to the market and will not be helped by the government’s decision to add further confusion and instability by moving the goalposts on the end of the sale of internal combustion engine cars.

“While ambition is understandable as we must address climate change and air quality concerns, blanket bans do not help short-term consumer confidence.

“To be successful, government must lead the transition with an extensive and appropriately funded package of fiscal incentives, policies and investment to drive demand.”

James Fairclough, chief executive of AA Cars, said: “The growth in sales of plug-in hybrids – up 111.1 per cent in January – would usually give a clue to where drivers are going to be spending their money this year.

“However, the government’s announcement that it intends to ban the selling of new hybrid cars by 2035, alongside new petrol and diesel vehicles, will shift buying patterns in the years ahead.

“Including hybrids in the ban could prove to be counterproductive if it leads some drivers to hold onto petrol and diesel cars for longer.”

Karen Hilton, chief commercial officer at Heycar, the online marketplace for used cars backed by VW and Daimler, noted: "Following a move away from diesel models in 2015, and efforts in choice and affordability in EVs and hybrids, the industry has had to make quick and immediate changes.

"Despite decreasing sales in the new car market, the used car market continues to grow. We put this down to customers looking past the confusion and investing their hard earned cash where they can see savings and value.

"Yesterday’s news on cleaning up our roads will mark another shift in industry behaviour and we expect to see a wider variety of EV and hybrids enter the used market as well - offering even more choice to car buyers."