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‘Grave concern’ for car industry as hybrid sales hit reverse gear

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Via Yahoo Finance

Sales of alternatively-fuelled cars have fallen in the UK for the first time in 26 months as the industry works towards an electric car future.

The Society of Motor Manufacturers and Traders (SMMT) said total sales of new cars continued to decline, for the fourth consecutive month, in June.

It reported falling demand in all sectors – with a 4.8% drop in consumers picking up a new model. Business registrations fell 37%.

It meant, the body said, that overall year-on-year demand was down by almost 5% in the month, with just 223,421 cars being ordered.

The weak performance meant sales were 3.4% down in the first half of the year compared to the same period in 2018.

The SMMT blamed continuing “confusion over low emission zones and diesel, the removal of key ultra low emission vehicle incentives and an overall decline in buyer confidence”.

It pointed to growth in June for petrol and battery-powered vehicles.

But of “grave concern”, it argued, was a 50% decline in plug-in hybrid models in June – building on a recent trend of falling sales.

Hybrid sales were almost 5% down.

The SMMT said: “The performance tipped the overall alternatively fuelled vehicle sector into negative growth for the first time since April 2017, undermining efforts to reduce emissions through fleet renewal of the latest ultra low emission vehicles.

“This is despite ongoing investment, which has enabled manufacturers to offer British car buyers more choice than ever before with more than 350 models now available in the UK – 44 of them plug-ins.”

The need for savings to drive an all-electric future has been blamed by manufacturers for a series of job losses and planned plant closures, including Honda’s Swindon factory and Ford’s engine manufacturing facility at Bridgend.

The demand for investment in electric is also taking place at a time of a wider slump in demand for new vehicles globally as economies are damaged by the effects of the US-China trade war.

The industry sees Brexit as a further headache.

It has been one of the most vocal critics of the UK’s departure from the EU, stating its very future is threatened if a no-deal scenario raises costs and disrupts supply chains.

The sales figures were released a week after the SMMT a 12th consecutive month of declining production.

Its chief executive, Mike Hawes, said of the latest developments: “Another month of decline is worrying but the fact that sales of alternatively fuelled cars are going into reverse is a grave concern.

“Manufacturers have invested billions to bring these vehicles to market but their efforts are now being undermined by confusing policies and the premature removal of purchase incentives.

“If we are to see widespread uptake of these vehicles, which are an essential part of a smooth transition to zero emission transport, we need world-class, long-term incentives and substantial investment in infrastructure.

“Fleet renewal remains the quickest way to address environmental concerns today and consumers should have the confidence – and support – to choose the new car that best meets their driving needs, whatever the technology, secure in the knowledge that it is safer and cleaner than ever before.”

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