9:23 am, December 5, 2022
The new car market grew by nearly a quarter in November to 142,889 registered units as the industry enjoyed its fourth consecutive month of year-on-year growth, according to SMMT figures published this morning.
The 23.5 per cent increase was the best total for November since 2019, when 156,621 units were registered, with manufacturers continuing efforts to fulfil orders amid erratic global components supply.
But they were still 8.8 per cent below 2019 levels, and while further recovery is anticipated next year, global and domestic economic challenges mean the market will remain below pre-pandemic levels, said the trade body.
Registrations by large fleets energised the market, up 45.4 per cent versus last November.
Demand from private buyers grew by 2.7 per cent, but business registrations more than doubled – up 112.2 per cent – although they are a small fraction of the overall market.
Zero-emission vehicle uptake continued to grow, with newly registered battery electric vehicles (BEVs) up 34.2 per cent to represent more than one in five new cars (20.5 per cent) – the largest monthly share of BEVs this year.
Conversely, plug-in hybrid (PHEVs) registrations fell by 5.8 per cent, making up 7.1 per cent of the market.
As a result, some 39,558 new plug-ins were registered, representing more than one in four (27.7 per cent) new cars joining UK roads in November.
Hybrid electric vehicles (HEVs), meanwhile, rose by 66.9 per cent to 11.3 per cent of the market, driven particularly by fleet operators looking for flexibility and emissions reductions.
The most in-demand supermini and lower medium vehicle segments both grew by 21.5 per cent and 20.5 per cent respectively in November, while dual-purpose vehicles increased by 21.8 per cent.
There was significant growth in luxury saloon and multi-purpose vehicles, up 87.3 per cent and 288.6 per cent respectively, but these segments still remain a small section of the market.
The SMMT said that as growth returns to the new car market, the car sector is poised to deliver an additional £8bn for the UK economy in 2023, with an anticipated 15.4 per cent market growth.
Mike Hawes, SMMT chief executive, said: ‘Recovery for Britain’s new car market is back within our grasp, energised by electrified vehicles and the sector’s resilience in the face of supply and economic challenges.
‘As the sector looks to ensure that growth is sustainable for the long term, urgent measures are required – not least a fair approach to driving EV adoption that recognises these vehicles remain more expensive, and measures to compel investment in a charging network that is built ahead of need.
‘By doing so, we can encourage consumer appetite across the country and accelerate the UK’s journey to net zero.’
What the industry says
How long will rise in EV uptake last?
Even though sales of electric cars have jumped more than a third in the past year, there are big question marks over how long this will last.
The strong November SMMT figures reflect much earlier demand for EVs that are only now being delivered due to supply problems such as semiconductor shortages or Covid lockdowns in Asia, which are now gradually easing.
Our data shows the cost-of-living crisis and high electricity prices are turning people away from EVs. Battery EVs accounted for just 19 per cent of our retailers’ sales leads in November compared with more than a quarter in June.
While EVs remain considerably more expensive to purchase than their petrol or diesel equivalents, recent commentary suggesting that they’re now more expensive to run is as misleading as it is damaging to the take-up of EVs.
Auto Trader data analysis of a wide mix of vehicles shows an average EV saving of circa £125 per 1,000 miles driven, which is actually up on the circa £100 saving seen in 2020.
Ian Plummer, commercial director, Auto Trader
Contractions are a major concern
It’s now almost certain that this year’s registrations will fall significantly behind last year’s, which marks a serious contraction given lockdowns and other pandemic measures were in place much throughout the first half of 2021.
While much of that is driven by the impact of the semiconductor shortage, it is of major concern that the cost-of-living crisis is now looming over the industry and prompting buyers to delay or cancel buying decisions.
At a time when the industry needs to invest huge sums in R&D, these contractions are a major concern.
However, once again the positives are that electric vehicle sales are on the rise – up more than a third on last year.
Our latest research of 1,328 in-market buyers shows 28.18 per cent of new car buyers are considering a fully electric vehicle as their next vehicle, which points to this being an ongoing trend.
But even this potentially positive story needs to be treated with caution; as energy prices continue to rise this year and next, it will remain to be seen if EV demand slows down.
Jim Holder, editorial director, What Car?
Flocking to greener ways to drive
Despite the prospect of a bleak midwinter, car buyers at large have not yet been put off buying a new car, with sales continuing to rise month on month versus the same time last year.
EV sales continue to represent a significant proportion of these sales as consumers flock towards greener ways to drive ahead of the 2030 fossil fuel ban.
Alex Buttle, co-founder, Motorway.co.uk
More support needed to help on path to 2030
The current economic climate is still proving challenging, but there are some positive signs of life coming from the motor industry.
The new car market appears to be picking up slightly, with demand being more closely met as supply chain issues begin to subside and production levels recover further.
For the past six months, the ratio between new petrol or diesel vehicle registrations and new EV registrations has been steadily increasing, albeit not at a fast pace.
The Autumn Statement introduced excise duty on electric cars from 2025, making already-hesitant consumers less likely to make the shift towards alternative fuel vehicles.
Far more support is needed from the government to help on the path to 2030.
An actionable plan is needed to resolve the infrastructure rollout risks and offer incentives to encourage consumer confidence with EV adoption.
Lisa Watson, director of sales, Close Brothers Motor Finance
Leasing is becoming more attractive
Four straight months of rising new vehicle registrations would be an achievement at any time, but with Britain sliding into recession it feels all the more impressive.
After a painfully slow start to the year – when the sector was hamstrung by supply shortages – sales are ending the year strongly, with drivers’ surging demand for EVs leading the way.
Pure EVs now account for well over one in four new cars sold in the UK.
For drivers with a finite budget, leasing a new car is becoming increasingly attractive, as the fixed monthly payments offer certainty and can also include other motoring costs such as breakdown cover and vehicle tax.
Meanwhile, a steady stream of drivers are opting to buy their next car second-hand rather than new.
We’re seeing this shift play out on the AA Cars website, with many would-be buyers using our platform to shop for a good-value used vehicle that’s available to drive away today.
James Fairclough, CEO, AA Cars
