The September roll-out of the new RDE2 vehicle emissions standards is causing a re-emergence of new car pre-registrations, the Vehicle Remarketing Association (VRA) heard at its July members meeting.
ASE Global chairman Mike Jones and Rupert Pontin, insight director at Cazana, both shared their view that late-month registration activity was once again on the increase as car manufacturers aim to shift their non-compliant stock through their dealer networks before September.
Despite last month’s granting of a derogation for non-RDE compliant vehicles by the Department for Transport (DfT), in an effort to smooth the transition period, both said that the early effects of a rush to register vehicles was being felt.
Jones said: “There is little question that pre-regs are back. Over the last few years, that kind of activity had declined in a fairly dramatic fashion, especially with the shortages of some models that followed WLTP.
“However, that has changed. There is now a lot of registration activity going on towards the end of each month. It’s yet another sign of the difficulties surrounding the new car market.”
Pontin added: “Pre-regs are really an indication of production overcapacity and disorderly marketing, both factors that have become part of the new car market in the last year or so. It is not surprising to see their return at this point.”
Pontin said that pre-registrations were likely to become more of an issue as the September RDE2 deadline approached, triggering a race to dispose of non-RDE2 cars.
New models must be compliant from January 2020 and all cars from January 2021.
Pontin said: “While there is still a little time before RDE2 becomes compulsory across the board, models meeting the standard are going to start appearing in larger numbers quite soon and manufacturers will want to move on the old stock.
“Simply because of the new car sales fall over the last 18 months or so, coupled with stockpiling because of Brexit, there is a lot of unsold metal around. The temptation to pre-register is very high and perhaps irresistible.”
Sam Watkins, chair at the VRA, said that the return of pre-registrations were understandable.
She said: “Pre-registering is a safety valve for a new car sector that is suffering from a combination of negative factors, from Brexit through to the decline of diesel.
“However, it does bring a degree of uncertainty to the used sector, especially surrounding nearly-new residual values. We expect it to be a subject that grows in importance for our members into 2020.”
Speaking in the Cox Automotive Market Insight report earlier this month, Philip Nothard, Cox’s customer insight and strategy director, said that the while introduction of RDE2 was “unlikely” to deliver similar rdisruption to last year's roll-out of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) for vehicles fuel economy, but said that it may “shake things up”.
Nothard said: “It’s clear that some manufacturers have enjoyed greater success than others in the first half of the year, but the introduction of RDE2 in September looks set to shake things up.
“With dealers reporting concerns that some manufacturers are not fully prepared for the change, we could see a drop in new car availability, and an unseasonable number of August registrations.
“That said, the new legislation is unlikely to have the marked impact caused by the first phase of WLTP last year.”
The roll-out of RDE2 in September means that it strict real-world testing of nitrogen oxide (NOx) emissions will become mandatory for all carmakers.
Under current legislation no new diesel or petrol engine car permitted to emit more than 0.080g/km.
RDE2, allows cars to emit 1.5 times the amount of NOx during RDE testing. This becomes mandatory for all cars on sale by January 2021.