The UK new car market fell by 6.8% to 2.37 units registered in 2018, the latest figures from the Society of Motor Manufacturers and Traders have revealed.

The SMMT blamed the second successive year of falling registrations on regulatory upheaval and continued anti-diesel campaigns along with a lack of business and consumer confidence.

The fleet market was  hardest hit, with the registrations in the fleet sector down by 7.3% compared with results from 2017. In 2018, fleet’s market share accounted for 51.7% of all new cars registered during the year, a slight dip on 2017’s figure of 51.9%.

Diesel suffered a particularly bad decline, with registrations of cars powered by the fuel falling by 29.6%, the SMMT said, adding that December 2018 was the 21st month in a row that diesel registrations have fallen.

True fleet registrations dropped by 4.8%

While petrol (up 8.7%) and alternatively-fuelled vehicle (up 20.9%) registrations increased during the year, this was not enough to offset the overall decline, with the SMMT suggesting that many drivers are holding onto their older vehicles for longer.

The average CO2 emissions of new cars registered rose for the second successive year, by 2.9% to 124.5g/km of CO2 with the SMMT blaming a widespread move away from diesel on the rise.

“Diesels are, on average, 15-20% more efficient than petrol equivalents and so have a substantial role to play in addressing climate change. The hard won gains made by the sector since CO2 records began in 1997 (when the new car fleet average was 189.8g/km) are being undermined by the shift away from diesel and disappointing growth in alternatively fuelled vehicles,” the industry body said.

Mike Hawes, SMMT chief executive, said:  “A second year of substantial decline is a major concern, as falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market. The industry is facing ever-tougher environmental targets against a backdrop of political and economic uncertainty that is weakening demand so these figures should act as a wake-up call for policy makers. Supportive, not punitive measures are needed to grow sales, because replacing older cars with new technologies, whether diesel, petrol, hybrid or plug-in, is good for the environment, the consumer, the industry and the exchequer.”

Ashley Barnett, head of consultancy at Lex Autolease, added:  “2018 was widely acknowledged as a challenging year for the new car market, with fleets in particular impacted by changes to emissions testing and an increasingly complex tax regime.  It’s therefore no surprise to see that total registrations are down on 2017 – and interesting also to highlight a 4.4% decrease in total registrations compared to 2014.  This supports the fact that fleets have been hardest hit, based on the average 48-month replacement cycle. Drivers that were due to renew last year evidently decided against it and we’ve seen an increase in contract extensions as a result.”