Deloitte comments on SMMT new car registration figures
5 September 2019
Michael Woodward, UK automotive lead, Deloitte, said:
“Car sales declined by -1.6% this month compared to the same time last year. Given that August is usually one of the quietest months for car sales and the uncertain economic climate, the industry will be encouraged to see the market more stable than expected.
“However, this masks a significant change in the type of technology preferred by consumers.
“Electric vehicle (EVs) popularity continues to accelerate with significant growth experienced year-on-year (+378%). As investment in infrastructure is made and more models enter the market, we expect this sector to grow further. This month’s significant increase in EVs reflects an increasing confidence in the technology and poses the question if we are closer than we think to the ‘tipping point’.
“The long-term decline in diesel car sales means that problems are mounting up for manufacturers and their partners. For example, as sales continue to decline, the industry is having to manage a surplus stock of new and used cars.
“Despite an encouraging month, there are potential headwinds. The value of the pound against the euro has fallen by -16% over the past three years, including a decline of -5% in the last six months. So far, the consumer has been shielded from price rises associated with currency fluctuation, but if the pound continues to decline, manufacturers may be forced to pass on the costs to consumers. If they do this at a time of surplus stock in used cars, this could put a huge dent in demand.”
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