March 2019

NEWS With 2018’s lower car sales levels continuing into 2019, ongoing lower new car sales could be a boon for the independent garage sector. Following the full-year results for 2018 being down by 6.8%, with annual registrations falling for a second year to 2,367,147 units, the figures for January 2019 from the Society of Motor Manufacturers and Traders (SMMT) told a similar story. According to the SMMT, the UK’s new car market fell 1.6% in January. During the month 161,013 new cars were registered for use on UK roads, with trends in fuel choice seen last year continuing in the first month of 2019. For garages looking for a guide on where trends are going, diesel sales continued to slide, with a 20.3% drop compared with January 2018. Petrol sales rose during the month though, up 7.3% compared with a year ago. Sales of alternatively fuelled vehicles (AFVs), including electric and hybrid vehicles grew 26.3%, resulting in a total 6.8% market share. Private buyers led the charge, with the numbers up 2.9%. In total, 71,378 cars were bought by private buyers. Conversely, business buyers stayed away, with a 33.5% drop in sales to this segment. Fleet sales were also down 3.4%. According to SMMT Chief Executive Mike Hawes, January’s figures are not cause for alarm, but do show ongoing weakness in the new car market: “It’s encouraging to see car registrations in January broadly on par with a year ago as the latest high tech models and deals attracted buyers into showrooms. This, however, is still the fifth consecutive month of overall decline in the market.” Intervention is required according to Mike: “To restore momentum, we need supportive policies, not least on vehicle taxation, to encourage buyers to invest in new, cleaner vehicles that best suit their driving needs – from the latest petrols and diesels to an ever growing range of exciting electrified vehicles. This would be good for the environment and good for the industry and those who depend on it.” While there is some good news amid the detail of the lower figures, the current weaker new car sales market could provide a boost for the independent garage sector as consumers opt to keep their vehicles for longer in an uncertain economic environment. As Independent Garage Association (IGA) Director Stuart James observed, falling new car sales does not mean the total number of cars on the road is reducing: “In these uncertain times with falling car sales, the number of cars on the road isn’t going down as owners keep cars longer. These cars need more and more servicing and repairs as they age – and independent garages are well placed to take on that business providing real value for money to keep motorists safely on the road. Even if, or when, new car sales return to their previous levels, sooner – if owners exercise their ‘Right 2 Choose’– or later, they will be serviced and repaired at an independent garage.” Stuart added: “Good independents will always generate good business.” IAAF Chief Executive Wendy Williamson commented: “While new car sales have declined, the overall vehicle parc is still growing as people are keeping hold of their cars for longer – put off by diesel, Brexit and everything else. One of the prime reasons for the recent decline in new car sales is the worldwide harmonised light vehicle test procedure (WLTP) which has markedly affected fleet sales.” WLTP is a lab-based test used to measure fuel consumption and emissions from passenger cars, including CO 2 as well as pollutants. The test was introduced in September 2018. Wendy continued: “VMs have struggled to put vehicles through the new test regime – with many models having been unexpectedly withdrawn – to get them to the quoted emissions levels. Another key factor is the uncertainty surrounding diesels, as well as the rates for company car taxation after next year which the government have yet to confirm. Given the importance of the fleets to new car sales, this has been significant.” While the aftermarket may see a work dividend if the car parc continues to age, the sector still needs to stay competitive according to Wendy: “What the aftermarket needs to focus on now and in the longer term is the upskilling of garages, to ensure technicians have access to the right learning tools and are fully trained to service new vehicles. She added: “As car sales decline, we are seeing the re-emergence of VM parts programmes pushing parts into independent garages and becoming very competitive. The whole of the supply chain therefore needs to ensure it is fully equipped to deal with these challenges.” 4 AFTERMARKET MARCH 2019 www.aftermarketonline.net Cloudy car sales outlook continues – Silver lining for independents?