Will consumers get on their skates for 68 plates?
To those with a passing interest in 20th century history, the number ’68’ immediately brings to mind images of enormous social and political upheaval. Whilst things aren’t quite that exciting for the UK car market yet, it has seen its fair share of turmoil and doubt in the months leading up to the release of the new 68 number plates at the start of the month.
The situation for manufacturers and retailers in the UK looks more challenging than it has been for some years. Car production for the domestic market fell by almost half in July, as manufacturers prepared to make their cars WLTP compliant. Year-on-year sales of diesel cars have also declined almost a full 30%; and at -26, consumer confidence is in short supply to say the least.
A most unconventional Q3
Perversely, however, external forces have actually played a part in boosting new car registrations and sales, over what is usually seen as the quieter part of summer for automotive retail. A 1.2% rise in registrations was recorded for July 2018, with 163,898 new cars hitting the UK’s roads over the course of the month.
The main motivation behind this is the newly introduced WLTP (Worldwide Harmonised Light Vehicles Test Procedure) and RDE (Real Driving Emissions) tests, which superseded the NEDC (New European Driving Cycle) tests on 1st September. Large numbers of cars produced under NEDC rules remained unsold, meaning that they would be useless when the new regulations were introduced.
The result was a surge in pre-registered models sold on as “nearly new”, impressive discounts on mass-market brands and an uptick in sales, along with the steep decline in car production mentioned beforehand. Peugeot, Suzuki, Volkswagen and Volvo in particular all did good business in July, and the sales figures for August are also likely to show greater enthusiasm than usual from consumers. It is also possible, however, that buyers largely sated by pre-September deals will fail to provide the usual sales bonanza for cars sporting the new 68 plates.
Industry crosses fingers for September
Nevertheless, manufacturers and dealers will be pulling out even more stops than usual to tempt buyers and ensure respectable Q3 results. Offers of list price reductions, highly competitive PCP arrangements, deposit contributions, servicing plans, GAP insurance deals and more, all jostle for space on dealer forecourts and website homepages. Nissan in particular are offering generous financing on older models such as the Micra, Juke and Qashqai during September, after a disappointing 2018 which has seen year-on-year sales drop by 30.54% and total market share drop to 4.46% from 6.07%.
Time will tell whether the 68 plate change will deliver the usual spur to sales and revenue. Manufacturers and retailers will both be hoping that their efforts pay off, and that enough demand exists to maintain profits in Q3 and provide some cheer in what many are regarding as a mediocre year for the UK automotive industry. We, along with everyone else, hope September proves them wrong.