Fleet News

Strong demand for used hybrid cars, says SMMT

Demand for petrol and diesel models declined in the second quarter, down by 3.7% and 2.5% respectively. However, combined sales of the fuel types still made up 98.3% of the market, according to new figures released by the Society of Motor Manufacturers and Traders (SMMT).

Demand for hybrid, plug-in hybrid and pure electric cars continued to grow, up 24.8%, with 33,492 models changing hands.

Of these alternative fuel vehicles (AFVs), pure electrics experienced the largest growth – up 32.8%, with hybrids also rising 25% to 29,321 units, but this growth was unable to offset losses elsewhere.

Overall, the UK’s used car market was down by 2.8% in the second quarter of the year. The 2,034,236 transactions that took place represented a shortfall of fewer than 60,000 units compared to the same period last year as the market showed signs of slowing.

Used car sales have fallen in every month this year apart from March, when they rose just 1.9%. In the second quarter, drops in the North West, Scotland and the South East drove the decline, while all other regions experienced increases in demand. Cities topping the list for used car sales were London, Birmingham and Sheffield.

Mike Hawes, SMMT chief executive, said, “With the country still gripped by economic and political uncertainty it’s perhaps unsurprising to see the used car market slowing down. This means owners are often holding on to their cars for longer, delaying the widespread introduction of the latest, cleanest models which is not good for air quality.

“We need a boost to consumer confidence, something that a Brexit deal would deliver, to improve the fortunes of the industry and the wider economy.”

Reflecting trends in the new car market, superminis remained by far the most popular used buy, with 665,469 of these smaller cars finding new owners, while the dual purpose segment enjoyed the largest growth, up 9.1% to 227,197 units.

One in five used cars bought in Q2 were black, buyers’ favourite colour choice ahead of silver/aluminium and blue, with pink the least popular of all despite a 20.3% rise in transactions, the largest uplift of any colour.

James Fairclough, CEO at AA Cars, said: “Two successive falls in used car sales is a disappointing result for the first half of 2019, but there is still plenty of time to reverse this trend.

“By and large, the used car market has proved resilient in the face of political uncertainty, and the modest 2.8% fall in sales offers some reassurance that it is holding steady on the whole.

“There are positives to find, including the continued growth in sales of alternatively fuelled vehicles. 
“As the availability of used electric and hybrid cars improves, increasing numbers of environmentally-conscious buyers are being tempted to see what’s on offer on dealers’ forecourts.

“The combination of strong demand and tight supply is helping these green cars retain their value well, and giving buyers an added incentive to seek them out.

“But the overall drop in used car sales could well focus dealerships’ minds when it comes to the way they source stock, and those who best meet customer demand, both online and on the forecourts, will continue to thrive."

Seán Kemple, director of sales at Close Brothers Motor Finance, added: “The increase, once again, in used AFVs is significant. It is further indication of how mainstream these cars are becoming, and how they have the potential to drive car sales overall. 

"Similarly, demand for small used cars is putting sales figures back on track and used diesels are holding strong in the forecourts. 

"Meanwhile, premium vehicles especially have taken a hit as dwindling demand for high-cost models drives down registrations. But the drop in overall sales reflects a wider crash in consumer confidence in the run up to Brexit, as the hesitancy to part with large sums of money prevails.”

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