UK passenger car registrations slide 1.6 percent during January
The UK passenger car market has slipped by 1.6% year-on-year (y/y) during the opening month of 2019. According to the Society of Motor Manufacturers and Traders (SMMT), registrations during January have fallen from 163,615 units to 161,013 units. The market was dragged down by a slide in fleet registrations (-3.4% y/y, 86,559 units) and demand from business customers (-33.5% y/y, 3,076 units), despite a 2.9% y/y increase in private customers to 71,378 units.
Significance: In a year that is uncertain for the UK, given that its stated departure from the European Union (EU) has yet to occur, it has been in some respects a bright start to the year. Part of the reason for this could well be the ongoing fulfilment of orders that were delayed due to the upheaval caused by the introduction of the Worldwide harmonized Light vehicles Test Procedure (WLTP) in September for some OEMs. There is also an ongoing transition away from diesel passenger cars in the UK like that in European markets. Demand in January fell by 20.3% y/y to 46,823 units, while registrations of gasoline (petrol) passenger cars increased by 7.3% y/y to 103,176 units. There was also a strong showing for alternative fuel vehicles, which gained by 26.3% y/y to 11,014 units, although this might be caused by the fulfillment of orders made following the announcement that the plug-in car grant would be reduced in October 2018. In our baseline scenario in which we see the UK leaving the EU on 29 March with a deal of some kind, we expect registrations to fall by 3.4% y/y to 2.29 million units, with a rebound beginning in 2020. However, if no deal is achieved, we would expect to adjust this, as suggested in our previously released scenario.
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