How Has Politics Affected The UK Automotive Industry So Far in 2017?

With the General Election in May and Article 50 negotiations beginning this week, it seems that automotive news has been rife with political policies regarding the impacts of the automotive and manufacturing industries, and particularly their effects on the environment. From diesel scrappage and clear air schemes, to the rise in popularity of alternatively fuelled vehicles (AFVs), it appears that the uncertainty that some governmental policies are generating is having a real impact on customer attitudes to car buying this year.

This was discussed in a seminar from last month's CDX17 expo, where Mike Hawes - Chief Executive of SMMT - mused over the potential impact of Brexit on the automotive industry, explaining to us how the uncertainty of political outcomes and the new road tax coming in during April affected short-term spending across the sector. New car purchases were also down by 20% during April, with the notion of buying a new vehicle being regarded a ‘luxury’ to some, as opposed to necessity.

It is hoped that with AVFs having reached an all-time height in popularity that this will carry the trade throughout summer, when a new range of low-emission vehicles will be launched, gifted with the latest connected technology.

What we know so far

  • Demands are rising for green vehicles

  • Electric and hybrid vehicles saw year on year search volume increases of 58% and 52% respectively, with Auto Trader seeing hybrids as the most searched and fastest selling cars

  • The Toyota Prius was the fastest selling used car in February.

Is there a political party that poses a high risk to the automotive industry?

In a poll ran by Motor Trader magazine in May, it found that 54% of voters agreed that the General Election would have a negative impact on Q2 new car sales.

All we know is that, by 2025, most parties want to see a change in diesel emissions and therefore want to have new diesel vehicles scrapped completely in favour of electric/zero-emission cars and vans.

However this poses another issue, as around 96% of commercial vehicles currently being sold - and are already on the road - already run on diesel!

Is there anything which could help car dealers during this time?

With there being more options available to finance new cars now, this could make the difference between a consumer buying one car from another, if bothering to go to a dealership and buy anything at all.

However used cars, whilst have seen an increase in sales, may face difficulties in the future due to the fact that they don’t necessarily meet consumer needs; they may lack the latest safety features or connected technology (which is constantly evolving) and the car can quickly become ‘outdated’.

With the political landscape in turbulence, the challenge lies in determining which political leader will become the champion of the automotive trade.

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