The UK new car market fell by 2.9% in February with 79,594 units registered during the normally-quiet month, according to statistics published by the Society of Motor Manufacturers and Traders.
The bulk of the decline can be attributed to falling consumer demand, as private car registrations fell by 7.9% compared with figures from February 2019, while fleet registrations increased by 31 units – or 0.1%.
Demand for both diesel and petrol cars fell in the month, with registrations down 27.1% and 7.3% respectively.
Diesel now accounts for just over a fifth of sales (21.9%). Hybrids (HEVs) recorded an uplift of 71.9% to 4,154 units, while registrations of zero emission capable cars also continued to enjoy growth, with battery electric vehicles rising more than three-fold to 2,508 units and plug-in hybrids up 49.9% to 2,058. However, these vehicles still make up just 5.8% of the market; and BEVs only 3.2%.
In order to increase demand for electric vehicles, the SMMT said it is calling for the removal of VAT from all new battery electric, plug-in hybrid electric and hydrogen fuel cell electric cars – a move which would cut the purchase price of an average family battery electric run-around by £5,600.
Combined with additional measures, including the long term continuation of the plug-in car grant at current levels and the reintroduction for plug-in hybrids and exemption from VED and insurance premium tax, the upfront cost of these vehicles could be cut by as much as £10,000, helping to deliver greater cost parity with conventionally powered vehicles and making them a viable option for many more buyers, the trade body said.
The SMMT said the removal of VAT could increase sales of battery electric cars alone to just under one million between now and 2024, resulting in CO2 saving of 1.2 million tonnes over this period.
Mike Hawes, SMMT chief executive, said: “Another month of decline for the new car market is especially concerning at a time when fleet renewal is so important in the fight against climate change. Next week’s Budget is the Chancellor’s opportunity to reverse this trend by restoring confidence to the market and showing that government is serious about delivering on its environmental ambitions. Industry has invested in the technology, with a huge influx of new zero- and ultra-low emission models coming to market in 2020, and we now need government to match this with a comprehensive package of incentives and infrastructure spending to accelerate demand.”