9:27 am, December 5, 2023
The new car market rose by 9.5% in November with 156,525 units sold, according to figures released this morning by the SMMT.
It makes it the market’s best November for four years, said the trade body, with registrations almost back to pre-pandemic levels – down just 96 units (0.1%) on 2019’s figure of 156,621.
Growth was driven entirely by fleets investing in the latest vehicles, with registrations increasing by 25.4% to account for 93,049 units and 59.4% of the market.
Private demand, on the other hand, dropped by 5.9% to 60,506 registrations, while business uptake fell by 32.7% to 2,970 units.
The year to date, though, sees the overall market up by 18.6% at 1.762m units, with a return to growth in the corporate market fuelling a recovery that has been under way for 16 months.
November was strong for hybrid-electric vehicles (HEVs) and plug-in hybrids (PHEVs), which rose by 27.8% and 55.8% respectively.
Fleets also continued to transition to battery-electric vehicles (BEVs), thanks to what the SMMT called ‘compelling tax incentives’.
Of the 24,359 new BEVs reaching the road in November, 77.4% were for fleets and businesses.
Overall BEV volumes fell by 17.1%, leading to a reduced market share of 15.6%, but November 2022 was atypical, said the SMMT, because of ‘significant deliveries’ after the supply chain disruptions.
Year to date, BEV uptake is up 27.5% with a 16.3% market share – expected to rise to 22.3% next year.
But the SMMT warned that with new regulation coming into force next month stipulating that 22% of each manufacturer’s new vehicle registrations must be zero emission, sustained recovery depends on giving consumers cash incentives.
It added that greater investment is also needed in essential charging infrastructure to give drivers confidence.
Halving VAT on new BEVs and reducing VAT on public charging to 5% in line with home charging would make driving electric more attractive, it said. It’d also make the zero emission transition more accessible to more consumers.
And the SMMT said that the need to delay tougher new UK-EU rules of origin which begin on January 1, was even more urgent.
It warned that failing to postpone them would see EVs that are traded both ways incur tariffs that would raise prices for consumers at a critical moment in the transition.
The SMMT says carmakers and governments on both sides of the Channel have urged a common sense approach to keep the current EV battery rules for three more years, to support consumer choice and affordability.
Mike Hawes, SMMT chief executive, said: ‘Britain’s new car market continues to recover, fuelled by fleets investing in the latest and greenest new vehicles.
‘With car makers gearing up to meet their responsibilities under new market legislation and Cop28 currently under way, now is the time to take sensible steps that will multiply that economic growth and minimise carbon emissions.
‘Private EV buyers need incentives in line with those that have so successfully driven business uptake – and workable trade rules that promote rather than penalise the transition.’
The Ford Puma was November’s best seller at 4,298 units, followed by the Vauxhall Corsa at 4,185 and Nissan Qashqai at 4,116.
What the industry says
Dealers need to ensure they keep track of trends
New registration figures have remained resilient despite a challenging economic environment and the usual winter slowdown.
However, the lack of any incentives for motorists in the chancellor’s Autumn Statement will not have spurred the demand for alternatively fuelled vehicles (AFVs), with numbers remaining skewed by fleet sales.
As motorists continue to battle the cost-of-living crisis and high upfront cost of AFVs, more will need to be done to encourage widespread adoption if the revised 2035 ban on new petrol and diesel vehicles is to go ahead.
Dealers will need to make sure they are utilising all available insight and tools to ensure they are keeping track of changing trends and stocking their forecourts to best meet demand, particularly as motorists look for cheaper options.
Lisa Watson, director of sales, Close Brothers Motor Finance
Growth trajectory should continue into 2024
The figures are a striking reminder of Britons’ continued willingness to commit to big ticket purchases like a car, even as they cut back spending elsewhere.
They come after ONS data showed that retail sales volumes fell by 1.1% in the three months to October.
With inflation falling sharply and signs that interest rates may have peaked, a gradual easing of the pressure on personal finances should help the new car market continue its growth trajectory into the new year.
Mark Oakley, director, AA Cars
Government must support industry in making EV transition
November’s drop in electric vehicle sales is a sign of what’s to come if the government doesn’t support the industry in making the transition by incentivising consumers on this journey.
Legal confirmation of the ZEV mandate last night at least gives the industry the clarity it needs, even though some manufacturers will struggle to hit these targets as they are behind the curve on electric sales.
But the latest tranche of fear, uncertainty and doubt that accompanied thisparliamentary vote won’t help consumers’ confidence in electric vehicles and is ultimately misleading, as electric cars currently offer savings of up to £155 for each 1,000 miles driven compared with petrol cars.
Ian Plummer, commercial director, Auto Trader
Motorists still feeling the squeeze
Private demand for all fuel types has fallen, and this serves as a reminder that motorists are still facing a squeeze on their incomes.
If the government is serious about helping people make the switch away from petrol and diesel cars, into hybrid or electric, then it needs to do more to encourage individual drivers – not just corporates.
Data from Carwow customers in November revealed that despite the chancellor’s £2bn commitment to fund future zero emissions, three in five think the government isn’t doing enough to encourage them to choose an EV as their next vehicle, and 24% of motorists are now less likely to buy an electric vehicle.
John Veichmanis, CEO, Carwow
One million milestone for EVs unlikely to be reached this year
We had hoped to see the one millionth electric car on the UK’s roads this year but this is now looking unlikely unless manufacturers manage to have a bumper, record-breaking December.
This milestone looks like it will now be passed in January.
We continue to urge the government to look again at the benefits of reintroducing a plug-in car grant aimed at the cheaper end of the electric car market to stimulate demand, as well as cutting VAT on public chargers to 5% to match the domestic rate
Simon Williams, head of policy, RAC
