Annual car registrations are set to fall by almost 200,000 units over the next two years, according to the Society of Motor Manufacturers and Traders (SMMT).
After reaching a peak of 2.6m in 2016, the SMMT expects a 4.7% decrease this year, and another 5.4% year-on-year fall in 2018. By the end of 2019, they are expected to fall to under 2.4m – an 11% slump compared to 2016.
Diesel cars’ share is expected to steadily decrease. While diesel registrations already fell over 15% compared to last year, SMMT said they will account for only 40.7% of the total in 2018. By 2019, diesel will see little over 900,000 registrations, taking a 27% fall compared to 2016.
Chris Bosworth, director of strategy at Close Brothers Motor Finance, said that the fact that the fall continued even through the traditionally succesful month of September would cause concern for industry players.
“There has been an unprecedented number of headwinds to the car industry this year, with VED changes, continued Brexit uncertainty, a weak pound, and the 2040 ban on petrol and diesel cars. Whilst registrations are expected to stabilise in 2019 with a forecast figure of 2.397m, we’re yet to see the full consequences of a simultaneous shift in consumer behaviour and government and regulator policy changes.
“Consumers will increasingly look to the used car market to reduce their depreciation risk and overall financial exposure in times of uncertainty. Dealers need to ensure they’re ahead of the curve and that they’re offering consumers the full range of finance and appropriate stock to respond to reducing consumer confidence.”