UK 2018 car sales analysis: winners and losers

This topic contains 1 reply, has 2 voices, and was last updated by  Mike 2 months, 1 week ago.

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    Brydo
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    The UK’s new car market contracted by 7% in 20187, as buyers held on to their cars for longer and resisted upgrading to a new model, figures out today show. Some brands – led by DS, Infiniti and Nissan – suffered major sales slumps and all but 10 manufacturers posted a decline on the previous year.

    A total of 2.37 million cars were registered last year, according to the full-year figures published by the Society of Motor Manufacturers and Traders (SMMT) this morning. Private retail sales fell by 6.4%, but fleet buyers were less active, with a 7.3% drop in corporate new-car sales.

    Consumer confidence has weakened, fears over Brexit and the economy have deterred buyers and the ongoing confusion over diesel’s role has further eroded new-car sales, according to the SMMT. Sales of diesel vehicles continued to collapse, falling by a further 30% in 2018 to 750,165 vehicles.

    To put that in perspective, 316,000 fewer oil-burners were sold last year compared with the year before. By comparison, sales of petrol cars rose by 8.7% while registrations of alternative fuelled vehicles (hybrids, plug-ins and pure electric cars) leaped by 21%. Today 6% of all registrations are electrified in some shape or form.

    https://www.carmagazine.co.uk/car-news/industry-news/uk-2018-car-sales-analysis-winners-and-losers/

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    Mike
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    Very Interesting.

    I was bequeathed some (well, less than 100) shares in the parent company of a national UK ‘multi franchise’ motor dealer group (albeit I have never bought a car from them). As such I get the usual investor bumph from them a couple of times a year, and the odd (now very odd) dividend share cheque, usually for a couple of pounds.

    Out of idle curiosity, I today had a read of their recent bumph I received a few weeks ago. It basically mirrors what Brydo has posted above regarding the new car market (so probably no share dividend again this year!). The forecast ahead is more doom and gloom in this market.

    The part I did find very interesting though, was their results and forecasts regarding ‘pre-owned’ cars at the allegedly ‘crucial’ 3-year-old point.

    It seems whilst sales of new diesels have slumped, the values of larger pre-owned diesels including SUV’s and ‘executive’ models are rising sharply – mainly due to less supply and very much increased demand from the public.

    Small diesel cars (the 1.0’s of this world) values have dropped like a stone though.

    Pre-owned petrol cars are holding their own, although executive and larger SUV’ sales are declining as petrol prices have risen recently. Smaller car petrol values are forecast to be static.

    The shocker was with regards to pre-owned electric/Phev and Hybrids where there is both very little demand and limited supply. The result however is that values have dropped, and this is expected to continue.

    The main concern of prospective private buyers of pre-owned electric/Phev/hybrids is the perceived life of the battery packs, and whether they are going to end up with a seemingly high replacement cost. Apparently, private buyers are wanting ‘chapter and verse’ about how these vehicles have been used since new and are shying away from ex-fleet vehicles, where it is perceived the batteries may have been abused (or completely ignored as per a story in the media a few months ago)! As a result, private buyers are in general avoiding them.

    The forthcoming London Congestion Charge applying to hybrids is also having an adverse effect in the south east of England, driving hybrid values even lower apparently.

    I just found it all quite fascinating, as I had never thought about values and demand ‘further down the line’.

    By the way, the bumph I am extrapolating this from had already been released to the stock market (and the share price went down accordingly), so I am not giving away any ‘privileged’ information.

    Mike

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