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Nine out of ten dealers reviewing fuel mix due to diesel concerns

Row of parked cars

Nine out of ten dealers plan to review their fuel profiles in 2018 in response to consumer uncertainties around diesel, new research suggests.

The Cox Automotive survey, which gathered views and sentiment from UK car dealers, shows that just over half of those surveyed altered stock profiles in 2017 (54%), but that nearly nine out of ten dealers plan to alter stock profiles for 2018 (87%).

The data also shows that 80% of dealers have seen a change in consumer attitudes towards diesel due to uncertainty around the fuel, and a further 86% say they expect this to continue into 2018.

The survey follows new figures released by the SMMT that show diesel car registrations fell by 22% year-on-year this September, leading to an overall reduction in new car registrations for the first time in six years.

“Concerns about the diesel market are definitely spreading among dealers,” said Philip Nothard, head of external relations at Cox Automotive.

“It’s been a volatile 12 months, and not entirely unexpected, but this level of decline in the new car market is significant.”

In terms of market share, Cox Automotive reports that diesel’s historically steady market share against petrol has shifted downwards in the last twelve months. The fuel, which held a 46% market share (against petrol at 50%) in September 2016, has now moved to 40% (against 54.6% petrol).

September data from Motors.co.uk, paints a similar picture on dealer forecourts with the first signs that days to sell are starting to lengthen for diesel, up from 39 to 40 days year-on-year. In comparison, petrol variants have reduced, down from an average of 38 to 34 days.

“Dealers are starting to sense that diesel vehicles could become more difficult to shift,” continued Nothard. “There are definite signs of consumer reaction to media reports on diesel, especially in regard to its environmental impacts.

“This media attention, combined with further external factors such as taxes and city charges have all contributed to consumer interest waning.

“We’re hearing that dealers who have lower spec or older diesel models on sale are worried – not only in terms of profit potential but also about the space these vehicles occupy while waiting to be sold.

“For dealers investing in newer models, the sentiment is more positive. New diesel cars are cleaner and have to pass strict emission tests before being sold, so they aren’t included in city charge schemes.”

The increase in desire and availability of hybrid and electric models is also being monitored across the market. Nothard said: “Consumers are actively looking for alternatives, although the pace of sale will remain low until infrastructure is improved.

“We already know from looking at data from Motors.co.uk that hybrid vehicles represent a very small percentage of sales, but when they are available, they sell quickly - on average, in just 29 days, compared to 80 days this time last year.”

Despite the advent of an ever-increasing number of alternative fuel vehicles on the market, Nothard predicts diesel will remain integral to the dealer market in the medium term.

“Let’s not get carried away, we won’t suddenly see dealers forgoing diesel altogether,” he said. “It will continue to rule as a leading fuel for some time. We predict dealers will continue to invest until a steeper downward trend in consumer demand is seen.”

 

 

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