9:26 am, September 5, 2023
Fleet sales propped up a 24.4 per cent rise in registrations in August, new figures show.
Data published this morning (Sept 5) by the Society of Motor Manufacturers and Traders (SMMT) reveals 85,657 cars were registered last month.
That’s a 24.4 per cent rise on the same month last year and confirms the new car market is now entering a second year of growth, said the trade body.
The increase was primarily driven by BEVs (battery electric vehicles), with registrations rising by a whopping 72.3 per cent over August 2022.
The SMMT warned though that despite the massive boost in EVs, the government still isn’t providing insight into details surrounding the upcoming Zero Emission Vehicle Mandate.
Registrations of plug-in hybrids rose by a similarly impressive 70 per cent during the month, with hybrids rising by 6.8 per cent.
Petrols saw an uptick of 9.8 per cent while diesel continued to slump. Sales of dervs slipped by just over 18 per cent.
Sales to fleets rocketed by over 58 per cent in August, while registrations in the private sector dropped by over eight per cent.
Auto Trader said that flattening retail sales shows the industry is now seeing ‘production exceed[ing] natural demand’.
The Ford Puma was again the month’s best-seller, and the crossover strengthened its grip on the year-to-date best-sellers chart.
So far this year, Ford has shifted 29,225 Pumas, beating the Vauxhall Corsa (25,692) and Tesla’s Model Y (24,148).
SMMT chief executive Mike Hawes said: ‘With the automotive industry beginning a second year of growth, recovery is under way with EVs energising the market.
‘But with a new Zero Emission Vehicle Mandate due to come into force in less than 120 days, manufacturers still await the details. Businesses cannot plan on the basis of consultations, they need certainty.
‘And now, more than ever, government must match action to ambition, ensuring there are the incentives and infrastructure in place to convince drivers to make the switch.’
What the industry thinks
Production exceeding demand
The headline figures are positive, but with sales growth being fuelled almost exclusively by various fleet channels in recent months, a quick look under the bonnet reveals the new car market’s reached a pivot point.
After years of heavily constrained new car supply struggling to keep pace with consumer appetite, for the first time since the pandemic we’re seeing production exceed natural demand, as evident in flattening retail sales numbers.
It’s good news for new car buyers, though. Not only have lead times dropped significantly, but the market’s currently awash with enticing offers, particularly for new EV models, from manufacturers hoping to stimulate demand for the September plate change.
And there are signs it’s working, as we saw a notable rise in new car activity across our platforms over the closing weeks of August.
The significant uptick in electric registrations is promising, but again, it continues to be propped up by fleet channels, as people take advantage of business-related tax benefits that make them more affordable.
Without those advantages, the current £50,000 median price tag for a brand-new electric car is far beyond most retail car buyers’ budgets.
But with the growing array of deposit contributions and zero per cent APR deals on offer that can now help bridge the affordability gap for private buyers too, we may well see a rise in vital private demand for EVs, which will be much needed if we’re to achieve the government’s 2030 ambitions.
Ian Plummer, commercial director, Auto Trader
Buyers putting off purchasing
August is traditionally a quieter month for registrations, as new car buyers wait for the September number plate change.
Even allowing for this, though, many private motorists appear to be putting off new car purchases due to the current economic conditions, with fleet buyers accounting for an increasing proportion of registrations.
This is particularly true for electric cars, with our website traffic showing that the popularity of these models is on the wane among private buyers due to concerns around the cost and availability of charging.
Steve Huntingford, editor, What Car?
More EV charging points needed
New brands entering the market are helping to broaden the range of EV models now available in the UK market and, with the easing of supply chain issues, demand is being met at a faster rate.
Looking ahead, the number of EVs should be in line with the new Zero Emission Vehicle mandate being introduced in January.
However, right now there needs to be a faster rollout of EV charging points. Continued improvement in the underlying infrastructure will be crucial if growth is to keep up with the rising thresholds for subsequent years.
Jamie Hamilton, automotive partner and head of electric vehicles, Deloitte
More used EVs for sale
London’s Ulez expansion officially came into effect in August, pushing more drivers toward eco-friendly cars to dodge added fees.
Whether this spurs more EV purchases is to be seen, but so far sales are considerably higher compared with last year.
Since January, UK production of hybrids and EVs has almost doubled compared with the same period last year.
With more new models making their way on to forecourts, we are also seeing more nearly-new EVs entering the used car market.
Mark Oakley, director, AA Cars
EVs are shining jewel in crown again
The sun has been shining on the new car market as summer sales volumes look bright with a 24 per cent rise.
With supply chain and production issues firmly in the past, consumer confidence in new car purchases has returned.
Once again, EVs are the shining jewel in the crown, taking up greater market share as more drivers look for greener alternatives to fossil fuels.
To get even more drivers to make the switch, the government could look to turbocharge this trend with better incentives and infrastructure, so that drivers can have more confidence they can charge their EV in more places, for an affordable price.
Alex Buttle, co-founder, Motorway.co.uk
