Analysis
24 Jul 19

UK true fleet sales falling sharply in 2019, but van sales rise

The UK true fleet market fell sharply in June amid confusion over the future for diesel with the introduction of low emission zones, the removal of financial subsidies for some hybrid vehicles, and a general decline in confidence until Brexit is settled.

Figures from Dataforce reveal that true fleet sales were down 7.2% last month, compared to June 2018, leaving fleet sales for the first half of the year down 6.2%.

The downturn did not have an impact on all manufacturers, however, with Dataforce reporting that Ford achieved a 17.8% increase in its true fleet sales in June, while Toyota did even better, growing its true fleet sales by 23.4%, SEAT by 30.8% and Volvo by 22.5%.

These mid-year successes maintain promising true fleet sales by three of the manufacturers, with Toyota up 8.2% for the first six months of 2019, SEAT up 11.5%, and Volvo surging ahead by 44.9%, driven by the success of the XC40 SUV (pictured above).

Across the true fleet sector Volkswagen retained its market leadership in June, despite seeing its sales fall by 11.3%, while Ford rose to second place on the back of a 17.8% rise in sales, helped by the Fiesta, Ecosport and KA+. Significantly, this was the first month of growth for Ford, once the UK’s fleet leader, since last August.

Moving in the other direction, BMW saw its true fleet sales crash by 32.8% last month, and Vauxhall (Opel) was down 46.3% in June, compared to 2018, according to Dataforce.

 

Future of company car tax

Manufacturers will now be hoping that the long-awaited clarity over the future of company car tax will give their true fleet sales a boost. Last week the UK Government finally revealed how company cars will be taxed under WLTP emission ratings, rather than NEDC. It also announced that electric cars and some hybrid models (those capable of 0-50g/km of CO2 and a zero emission range of 130 miles (208km) will be tax free in the 2020-21 financial year, a move expected to energise the true fleet sector where companies and drivers have been delaying the replacement of company cars until the new tax system was confirmed.

Official figures from the SMMT, the UK manufacturers’ association, recorded fleet sales (including true fleet, daily rental, manufacturer registrations, and Motability) of 126,836 units in June, down 2.5% on 2018. This left the fleet sector 1% down for the year to date at 677,949 registrations, and a 52.9% share of the UK’s new car market.

Hybrid sales tumble

Interestingly, while battery electric vehicle sales in the combined fleet and private markets soared by 61.7% in June to 1,522 units, and are 60.3% up for the year to date to 11,975, sales of hybrids were down sharply, slipping 50.4% in June, and 29.6% lower year-on-year to 14,923 registrations. The slump follows the removal of Government subsidies for certain hybrids, including the popular Toyota Prius and Mitsubishi Outlander. Diesel sales also dived, down 20.5% in June and 19.4% lower for the first six months of the year.

Mike Hawes, SMMT chief executive, said: “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 andconsumers 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.”

LCV sales lift the market

The one positive note in June was a welcome rise in the true fleet sales of light commercial vehicles (LCVs), up 11.6% year-on-year and rising 8.4% for the year to date, according to Dataforce. Ford dominates this market (thanks to the Ford Transit Custom and Transit) with twice as many sales as its nearest competitor, Mercedes-Benz, despite the latter growing strongly last month as sales of the Sprinter rose by 47.7% year-on-year. Renault, too, had a good month thanks to the Trafic, with its true fleet sales up 27%.

The SMMT’s figures show LCV sales up 13.5% in June, compared to June 2018, with 39,929 registrations. Over the first half of this year LCV sales in the UK are up 8.7% to 196,418 units, an encouraging sign for the economy and the environment.

“With many light commercial vehicles playing a crucial role in urban areas, getting more of the latest, cleanest and most fuel efficient models on to our roads is essential to help improve air quality – so it’s good news to see the UK van market performing so well. However, it’s important to remember that purchasing patterns are cyclical and for this trend to continue we need business confidence to improve and political uncertainty to end with a good Brexit deal,” said Hawes.

 

 

 

 

Authored by: Jonathan Manning
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