TWO interesting reports were published this morning. The first came from the SMMT (Society of Motor Manufacturers and Traders) and the second from Kwik Fit.

September is traditionally an important month for the UK automotive industry – number plate changes help drive new car registrations – but last month saw figures fall by nearly 10%. According to the SMMT report that fall is reflected right across the sector with business, fleet, and private sales all falling last month.

It sounds dramatic but you need to put the figures into context. Yes, new car registrations fell but there were still in excess of 426,000 new cars registered in September. It’s certainly a concerning trend, but it’s not an existential crisis.

On the bright side, while petrol and diesel fell back the demand for alternatively fuelled vehicles (AFVs) surged 41% for the month, up 34% year to date. The shift to electricity has been growing steadily for a while now.

Tie that to the Kwik Fit survey and things begin to make more sense.

Kwik Fit found that only 16% of those considering a new car in the next two years are planning on buying a diesel, compared to 42% opting for petrol, 19% choosing a hybrid, and 8% preparing to go fully electric.

According to the Kwik Fit study, of the 11 million drivers whose main car is currently a diesel only 36% are expected to choose another diesel car. In contrast, 46% are likely to switch to other engine types – 19% to hybrids, 18% to petrol and 9% to electric motors.

It appears that we haven’t fallen out of love with the internal combustion engine, it’s more a repositioning of the market as more people consider the alternatives and make a decision based on their own particular needs. After all, a third of diesel drivers will happily choose another diesel next time. Most of the remaining two thirds are simply switching from diesel to a petrol or petrol/hybrid to take advantage of the new generation of efficient engines.

Interestingly the study also seems to suggest that some buyers would be tempted by a diesel if they were offered sufficient incentive. On average, motorists would want a new diesel car to be around 18% cheaper than the petrol equivalent for them to consider buying it. Those who currently drive a diesel would still be looking for a discount although not quite as large.

Which brings us back to the SMMT figures. They believe the fall in new car registrations is more likely to be tied to economic uncertainty – we won’t mention Brexit – and confusion over Government air quality plans.

The recent introduction of so many scrappage schemes has gone some way to providing the necessary incentive but clearly some people are still holding off. The country is also split as to whether the Government will achieve the target of eliminating diesel and petrol engines by 2040 so many people will be waiting to see how that situation develops first.

Mike Hawes, SMMT Chief Executive, said,

“September is always a barometer of the health of the UK new car market so this decline will cause considerable concern. Business and political uncertainty is reducing buyer confidence, with consumers and businesses more likely to delay big ticket purchases. The confusion surrounding air quality plans has not helped, but consumers should be reassured that all the new diesel and petrol models on the market will not face any bans or additional charges. Manufacturers’ scrappage schemes are proving popular and such schemes are to be encouraged given fleet renewal is the best way to address environmental issues in our towns and cities.”

These figures, and the Kwik Fit study appear to confirm – at least to us – that the main reason that new car registrations are falling is because people are holding back while they figure out what it is going on. Either that, or they are taking advantage of the boom in leasing deals that gives them flexibility and economic stability when it comes to choosing a car.

Those that do take the plunge seem to be working their way through all the current confusion and making the decision that suits them. Whether it is to move to AFVs or stick with petrol or diesel, most people seem to be choosing the best option for their circumstances. And quite rightly so.