Automotive Insights

Automotive Insights: November 2017 News round-up

Our November automotive news round-up covers registration data, the struggle of ride-hailing apps in London, and a summary of the global news.

Registrations for September 2017

Registrations in the UK passenger vehicle market fell 9.3% throughout September and in October were down 12.2% month-on-month. The SMMT has subsequently reduced its annual year end forecast to 2.565 million units sold by the end of 20171.

As we have seen in previous months, premium German brands such as Mercedes-Benz, BMW and Audi have continued to buck the trend, with a combined market share of 20.65%, an increase of  6.17% from year-to-date in 2016. Conversely, Ford and Vauxhall's combined market share has fallen below 20% to 19.12%, down 9.72% from last year's combined market share of 21.18%.

Mercedes-Benz was the best performing of the premium German brands, with a substantial increase in year-to-date market share of 7.12%, despite a recent dip in performance with a 1.78% decline within the month of September, compared to the previous year. This puts Mercedes-Benz in a strong and enviable position.

As with most of the rest of the market, demand for new light commercial vehicles declined by 7.35% in October, coming in at 24,968 units. Year-to-date registrations dropped by 3.46%, another indication of business confidence suffering in uncertain political times. In fact, commercial vehicles >3.5t and <6.0t declined sharply in the month of October and are down 34.59%.

Ride-hailing apps stall in London

Two high-profile ride-hailing apps have lost their license to operate in London, with Uber having its license to operate in the city suspended and recent rival Taxify being banned completely.

Uber has angered UK authorities by operating a corporate structure that saw Uber as we know it paying only £411,000 in tax throughout 2015 despite turnover reaching £23.3 million. Uber is in fact a company of two halves; Uber BV, a company in The Netherlands responsible for running the app, and Uber London Ltd, responsible for operating the vehicles. ULL is based in London as a separate entity, therefore it’s the only part of the business that pays corporation tax in the UK2.

A lack of employee benefits and a failure to report the criminal activities of its drivers have also exacerbated the situation and specific cases were directly referenced by TfL when deciding not to renew Uber's license.

Taxify meanwhile, which is backed by Chinese ride-hailing firm Didi Chuxing, launched and suspended operations in London in just three days. Instead of applying for their own license, Taxify bought out an existing company and changed the branding, a move that contravened TfL's rules about licensing and launched an urgent investigation3. Taxify’s eagerness to capitalise on Uber's weak position backfired and the app has since been banned from the capital4.

Global news round-up

Other stories from the automotive world making headlines this month are:

  • Aluminium and electric vehicle production in the UK is set to increase thanks to a £9.6 million investment from the Norwegian aluminium company, Sapa. Sapa is on track to reopen a factory in Bedwas, Wales, in order to meet increasing demand for materials from manufacturers making electric vehicles. One of the biggest orders so far is from the London Electrical Vehicle Company, which will produce the new range of electric black cabs5.
  • The National Grid has forecast that electric vehicles could see the UK's need for electricity increase by 30 gigawatts, the capacity of ten modern nuclear power station, by 2050. They've arrived at the figure by analysing the projected sales of electric vehicles and the impact of use at busy times of the days. The National grid pointed out that this is the most extreme power usage forecast and that the burden on the UK's power supply can be cut down with smart charging technology and owner discretion as to when they charge their vehicles6.
  • London has been revealed as the second most expensive city in the world to travel in. According to figures from Haver and Goldman Sachs, Londoners spend a greater proportion of GDP on Transport (6.9%) than those living in San Francisco, Tokyo, and New York7. The most expensive city in the world to travel in is Mexico City.

Sources:

  1. SMMT, Vehicle Data
  2. London Connections, Understanding Uber: It’s not about the app
  3. Wired, London’s latest cut-price Uber rival is being investigated by TfL, 7 September 2017
  4. Business Insider, Taxify has launched in Paris after being kicked out of London, 5 October 2017
  5. Financial Times, New cabs for London drive re-opening of Welsh plant, 18 September 2017
  6. The Telegraph, Diesel and petrol car ban, 25 July 2017  
  7. Financial Times, Uber launches effort to save crucial London market, 24 September 2017