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A day after Aston Martin's float, UK car sales plummet as consumer confidence wanes

Published: 12:04 04 Oct 2018 BST

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September's figures were affected by the new European emissions rules

Just a day after Aston Martin Lagonda Global Holdings PLC (LON:AML) floated in London, UK car sales fell by a fifth in September, hit by a combination of weak consumer confidence, Brexit concerns and a supply chain squeeze caused by new European emissions standards.

The Society of Motor Manufacturers and Traders (SMMT) said 338,834 vehicles were registered, down 20.5% compared to the same period last year.

READ: Aston Martin moves slowly into gear in conditional trading

The shocking fall comes just a day after luxury carmaker Aston Martin Lagonda floated on the London market. The £19 IPO price tag has already reversed to less than £18 and today’s SMMT figures will do nothing for consumer confidence or sentiment towards the auto industry.

The SMMT said the latest figures were affected by the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) affecting all cars sold in the EU from 1 September. The new emissions and fuel economy test is designed to replicate real road conditions better than the old standard.

“September’s performance was a matter of basic economics; there simply weren’t enough cars on forecourts that met the new WLTP standards for retailers to sell," said Auto Trader director Ian Plummer.

September is usually a key month for car sales as new registration plates are issued, though this year, many purchases appear to have been brought forward to August - which saw a surge of 23% - ahead of the changes.

"With the industry given barely a year to approve the entire European model line-up, it's no surprise that we've seen bottlenecks and a squeeze on supply. These are exceptional circumstances with similar declines seen in other major European markets,” SMMT’s CEO Mike Hawes said in a statement.

READ: Aston Martin investors told to pay £19 per share for IPO orders or risk losing out

Analysts at Barclays said that with car manufacturers focused on ensuring they are in line with new regulations and given the reluctance of buyers to commit to big purchases, in part due to Brexit, 2018 car sales are highly likely to be down on 2017’s figures.

Diesel sales plummeted, falling 42% year-on-year to 98,191 from 170,733 in September 2017. Analysts believe this fall can be attributed to uncertainty over the future of Diesel vehicles.

Peugeot became the latest carmaker to confirm that it is ceasing production of diesel engines. The French carmaker – following the lead of the likes of Porsche and Volvo - has temporarily stopped making diesels as the future of the fuel type is “uncertain”.

On a more positive note, sales of electric vehicles hit a record high last month, up 23% last month compared to September 2017.

Electric cars are becoming increasingly popular and now account for one in every 12 cars purchased in the UK. Aston Martin plans to take on the likes of Tesla by launching its first electric vehicle – the Rapid E – by the end of 2019.

Sales of alternatively fuelled vehicles only rose by 3.9% year-on-year, having been rising by over 20% since January.

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