U.K. Sales Fall 5.7%, but EVs Up 34.8%

U.K. new car sales dropped for the ninth straight month in December, pushing the full-year total down 5.7% to 2,540,617 units – still the third biggest in a decade. The Society of Motor Manufacturers and Traders says it was the first year-on-year fall in six years.

Private, fleet and business sales all were down, with demand from private motorists declining 6.8%, fleet sales off 4.5% and business demand down 7.8%

The most popular vehicle choices were, once again, superminis, small family cars and dual-purpose SUVs, with the latter the only segment to grow demand. One in every five new cars sold in the UK is now dual purpose, up from one in 10 five years ago.

Demand for electrified cars reaches a record high, rising 34.8% to 120,000 units. A record number of hybrid, plug-in hybrid, battery-electric and hydrogen fuel-cell cars were sold, giving the sector its highest-ever annual market share at 4.7%.

Demand for gasoline cars rose in the year, but by a modest 2.7%. This was not enough to offset a 17.1% decline in diesel registrations – with SMMT saying anti-diesel rhetoric and the potential for tax hikes caused buyers to hesitate.

Latest calculations by SMMT highlight the money-saving benefits of diesel cars, with drivers of diesel-powered D-segment family vehicles, SUVs and executive cars saving an average of between £300 and £400 ($412 and $549) a year on their fuel bills. Across all body types, the average is £132 ($181) a year – equivalent to an average household’s quarterly electricity budget.

SMMT CEO Mike Hawes says the decline in the new car market is concerning, but it’s important to remember demand remains at historically high levels.

“Falling business and consumer confidence is undoubtedly taking a toll, however, and confusing anti-diesel messages have caused many to hesitate before buying a new low emission diesel car,” Hawes says in a statement.

He says 2017 was a very volatile year, “and the lackluster economic growth means we expect a further weakening in the market for 2018.”

The U.K. market remains the second biggest in the European Union, behind Germany. It is also one of the most diverse, with consumers able to choose from some 350 different models, fuel types and body styles.

SMMT says 60 new models, boasting next-generation technology – from systems that take over the driving in traffic jams to those that detect potential collisions with pedestrians in day and night-time driving – are set to make showroom debuts in 2018.

Ford Fiesta was the market leader with 94,533 units, ahead of Volkswagen Golf at 74,605 units and Ford Focus at 69,903 units.

Volkswagen U.K. new car sales rose 0.69% to give it a market share of 8.21% and making it the U.K.’s second-biggest car brand behind Ford.

The light commercial vehicle market fell for the first time since 2012, dropping 3.6% to 362,149 units, third highest in a decade.

Hawes says while the market slowed in 2017, it is in line with expectations and demand remains at a high level – LCV sales have risen 62.5% since 2010.

“For 2018, however, we expect the economic and political uncertainty to continue to affect the market, so government must rebuild business confidence and encourage operators to invest in new vehicles given fleet renewal is the fastest way to reduce overall emissions,” Hawes says.

Ford took the two top LCV sales positions with the Transit Custom selling 51,885 units and the Transit 27,062. They were followed in third place by Mercedes-Benz Sprinter (23,588 units).

Kia U.K. reported sales rose 4.3% to 93,222 units, the sixth consecutive year of record results. Despite the overall down-market outlook, President and CEO Paul Philpott is challenging the 190 dealers to top 95,000 units in 2016.

Philpott is setting a long-term goal of reaching 120,000 units a year – or 5% of the U.K. market.

Kia’s biggest seller was Sportage with 39,683 units.

Suzuki GB sales rose 6% to a record 40,343 units, after a best-ever fourth quarter that sold 6,658 units.

Volvo U.K. posted its second-highest annual sales figure for 25 years, selling 46,139 units, just below its 2016 record of 46,696 units. The XC60 was its best-selling model with 16,302 units, followed by the V40 (14,256) and the XC90 (6,210).

Mercedes-Benz Cars U.K. ended the year with record sales up 6% to 179,000 units and a record market share of 7%.

SMMT CEO Mike Hawes.

It was the eighth consecutive year of growing sales for Mercedes-Benz, placing the brand fourth in the U.K. market and first among premium manufacturers.

Managing Director Gary Savage says the biggest seller was the A-Class, topping 43,000 units, while SUV sales grew 16% to 36,000.

In the first full year since Mercedes-Benz Vans U.K. became a legal entity, the brand put in a record-breaking eighth consecutive year of growth as sales grew 12% to 41,404 units – the first time it has broken through the 40,000-van sales barrier in the UK.

The company says in a statement it sold more vehicles in the U.K. than the domestic market of Germany, and any other market area in the world.

Luxury sportscar and supercar builder McLaren Automotive says its 3,340 units sold last year was a record.

About two-thirds of sales were attributed to the Sports Series family with 2,119 units, up from 2,031 in 2016. Super Series sales performed strongly with 1,221 cars sold - nearly the same as the 2016 result despite only six months of delivery.

McLaren CEO Mike Flewitt says demand was strong across product lines, with interest particularly robust in its biggest market, North America, where it sold 1,234 units (up from 1,139 cars in 2016).

Flewitt says 2018 will also see the continued development of the company with the planned opening of a second production facility in Yorkshire.

Luxury sports car maker Aston Martin sold 5,117 units last year amid sell-out demand for its DB11 model. Retail sales, which saw a 58% year-on-year increase, outpaced wholesale supply, up 38%.

Aston Martin President and CEO Andy Palmer says the brand continues to perform ahead of expectations. He says the highest full-year sales volume in nine years was driven by rising demand in North America, the U.K. and China.

MG UK reports 2017 sales rose 6% to 4,440 as it produced growth in every month of the year. The company celebrated a key milestone with its Supermini, the MG3, which achieved 10,000 lifetime sales during the year.