Two straight years of growth for new car market, claims SMMT

• UK new car market rises 2.5% in July to deliver 24 consecutive months of growth.

• Battery electric vehicle uptake outpaces overall market, up 18.8%, but remains behind mandated transition trajectory.

• New outlook reduces expectations to 1.968m units for 2024, with BEVs anticipated to comprise 18.5% of uptake.

The UK new car market rose by 2.5% in July, delivering two years of consecutive growth, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). 

With 147,517 new cars reaching the road, it was the best performance for July since 2020, when a re-opening of dealerships following four months of lockdown saw a surge in deliveries to fulfil demand pent-up demand.

As has been the pattern for the year, July’s growth was sustained entirely by the fleet sector, which recorded a 13.0% increase in registrations to achieve a 62.0% market share. Private demand continued to diminish, falling by -11.1% to account for 36.2% of deliveries in the month, although the growing popularity of salary sacrifice purchasing will contribute to this decline.

Electrified vehicle demand outpaced the overall market, accounting for four in 10 (42.0%) new cars registered in the month. Hybrid electric vehicle (HEV) uptake increased by 31.4% to achieve a 14.5% market share, while plug-in hybrids (PHEV) grew 12.4% to take 8.9% of registrations.

Battery electric vehicle (BEV) volumes, meanwhile, were up 18.8%, resulting in an overall market share of 18.5%. While the private share of the BEV market continues to fall (17.2% went private buyers, compared with 20.3% last year) private BEV volumes did increase by a marginal 0.9%. Overall, BEVs account for 16.8% of the new car market, year to date.

With zero-emission vehicles mandated to comprise a minimum 22% of each brand’s new car registrations over the full year, the pace of transition needs to increase significantly, says SMMT. The latest industry outlook, however, suggests that such a surge is looking increasingly unlikely given the current market conditions.

While the outlook anticipates overall market growth in 2024, expectations have been revised downwards since April, with 1.968 million new car registrations now forecast by the end of the year. The anticipated BEV share of the market has also been revised downwards to 18.5% from the 19.8% expected in April.

Says Mike Hawes, SMMT Chief Executive:

 “Two years of new car market growth against a backdrop of a turbulent economy is testament to the sector’s resilience and the attractiveness of the deals on offer. Weakening private retail demand, however, particularly for EVs and despite generous manufacturer discounts, is the over-riding concern.

“More people than ever are buying and driving EVs but we still need the pace of change to quicken, else the UK’s climate change ambitions are threatened and manufacturers’ ability to hit regulated EV targets are at risk. Achieving market transition at the pace demanded requires greater support for consumers and, with the all-important new numberplate month of September beckoning, action on incentives and infrastructure is needed now.”

Adds Felicity Latcham of OC&C Strategy Consultants:

“July’s car registration figures reveal a positive uplift from June both in volume of vehicles registered (up 2.5%, 5.5% year to date), and a positive headline shift towards carbon neutrality with 18.8% uplift in BEVS this month compared to the 7.4% uplift in June.

“However the growth both overall, and in BEVs, is underpinned by adoption in fleet, with private sales down 11% YoY. This is reflected in the research conducted by OC&C, where our speedometer report showed personal appetite for EVs to be slowing, despite 44% of people acknowledging the rising costs of petrol and diesel, and the 2024 report (to be published) showing 31% of individual drivers reporting delaying their car purchase because of the cost of living”

 

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