The fleet sector was hit the hardest as the UK new car market fell by 6.8% in 2018, with annual registrations falling for a second year to 2,367,147 units.

According to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT), the fleet sector was down 7.3% while private motorists and smaller business operators fell 6.4% and 5.6% respectively.

A 5.5% decline in December capped a turbulent year of model changes, regulatory upheaval and continued anti-diesel policies, adding to the ongoing decline in consumer and business confidence, said the SMMT.

Demand also fell across all vehicle segments bar the dual purpose category, which grew by +9.1% to take a fifth of the market (21.2%).

Smaller vehicles remained the most popular – with a combined 58.7% market share.

The biggest volume decline was seen in the diesel sector, down 29.6% in 2018, with the volume loss equivalent to some 180% of the overall market’s decline.

The SMMT blamed anti-diesel rhetoric and negative fiscal measures with December marking the 21^st consecutive month of decline for the fuel type – despite new emissions tests showing diesels deliver in the real world.

Growth in registrations of petrol (+8.7%) and alternatively fuelled vehicles (+20.9%) replaced some of the loss but not enough to offset the full shortfall as many diesel owners adopt a ‘wait and see’ approach, keeping hold of older, more polluting vehicles for longer.

In the AFV sector, petrol electric hybrids remained the most popular choice, up +21.3% to 81,156 units. Plug-in hybrids (PHEVs) also recorded a strong uplift (+24.9%) over the year, though the figures suggest growth is slowing following the removal of the Government’s plug-in car grant for these vehicles in October.

Demand for PHEVs grew almost 30% in the first 10 months, but year on year increases fell to 3.1% and 8.7% in November and December respectively. Pure electric cars, meanwhile, grew 13.8% in the year but, with just 15,474 registered, they still make up only 0.7% of the market. Given the reduction in government incentives, the pace of growth of plug-in cars is now falling significantly behind the EU average.²

SMMT data also showed the UK new car fleet average CO₂ rising for a second successive year, by 2.9% to 124.5g/km. This is despite huge investment by manufacturers to deliver ever more efficient cars, with the average new or updated model emitting -8.3% less CO₂ than that it replaced.

While part of this fleet average CO₂ increase was due to segment shift and the introduction of the new WLTP test which produces higher figures, the move away from diesels is having a significant impact.

Diesels are, on average, 15-20% more efficient than petrol equivalents and so have a substantial role to play in addressing climate change. The hard won gains made by the sector since CO₂ records began in 1997 – when the new car fleet average was 189.8g/km – are being undermined by the shift away from diesel and disappointing growth in alternatively fuelled vehicles.

Mike Hawes, SMMT Chief Executive, said: “A second year of substantial decline is a major concern, as falling consumer confidence, confusing fiscal and policy messages and shortages due to regulatory changes have combined to create a highly turbulent market.

“The industry is facing ever-tougher environmental targets against a backdrop of political and economic uncertainty that is weakening demand so these figures should act as a wake-up call for policy makers.

“Supportive, not punitive measures are needed to grow sales, because replacing older cars with new technologies, whether diesel, petrol, hybrid or plug-in, is good for the environment, the consumer, the industry and the exchequer.”