9:27 am, April 4, 2024
March saw the UK new car market enjoy its 20th consecutive month of growth with a 10.4% rise in registrations and 317,786 new cars hitting the road, the SMMT said this morning.
What is typically the busiest month of the year thanks to the new numberplate was the best March performance since 2019, although it was still 30.6% below pre-pandemic levels when March of that year saw 458,054 registrations.
The trade body said the growth was once more driven by fleet investment – up 29.6% as the sector continues to recover after the constrained supply of previous years.
Registrations by private buyers fell by 7.7%, though, courtesy of ‘a challenging economic backdrop of low growth, weak consumer confidence and high interest rates’.
Meanwhile, the small business registration sector dropped by 8.0%.
The top-selling new car in March was the Nissan Qashqai at 8,931 units, with its Juke stablemate fourth at 7,346.
In second place was the Ford Puma with 8,318 sales, while third was the Kia Sportage at 7,445.
Petrol cars kept hold of the lion’s share of the market at 55.7% and 177,019 units, with registrations up 9.2% year on year, but diesel volumes fell by 2.7% to 23,312, accounting for just 7.3% of demand.
Uptake of hybrid-electric vehicles (HEVs) reached record levels, though, rising by 19.6% to 44,550 units and 14.0% of the market, while the biggest percentage growth was recorded by plug-in hybrids – they were up by more than a third to 24,517 units, or 7.7% of all new registrations.
However, although battery-electric vehicle (BEV) registration volumes were at their highest recorded levels at 48,388 units, market share fell by one percentage point from the same month last year to 15.2%. Registrations were up by 3.8%, with only fleets showing any volume growth.
The SMMT said the fall in BEV market share within a growing market underscored the need for the government to support consumers to speed up fleet renewal.
It said large fleets continued to drive BEV uptake, thanks to compelling tax incentives, but while registration volumes increased in March, the market share declined and a tough economic backdrop made it increasingly challenging for consumers to invest in the new technologies.
Manufacturers themselves are offering generous incentives – the SMMT cited What Car? research showing that EV discounts have risen by 204% since January 2023 – which was helping more drivers switch to zero-emission vehicles and deliver government and industry carbon targets, but this can’t be sustained indefinitely, said the industry body.
It said a full market transition needed incentives for private retail buyers as well, not just for fleet and business buyers, which would bring the UK into line with other major markets.
Temporarily halving VAT on BEVs, revising the threshold for the expensive car supplement on vehicle excise duty next April, and abolishing the ‘pavement penalty’ on public EV charging by equalising VAT rates to 5% in line with home charging would make a significant difference to consumers, it said, helping more of them move to zero-emission vehicles sooner.
SMMT chief executive Mike Hawes said: ‘Market growth continues, fuelled by fleets investing after two tough years of constrained supply. A sluggish private market and shrinking EV market share, however, show the challenge ahead.
‘Manufacturers are providing compelling offers, but they can’t single-handedly fund the transition indefinitely.
‘Government support for private consumers – not just business and fleets – would send a positive message and deliver a faster, fairer transition on time and on target.’
What the industry says
Chinese entrants set to continue to bring down EV prices
Sales of electric vehicles are still rising, despite the gloom from Tesla earlier in the week.
While the fleet side of the market is driving the growth, more needs to be done to stimulate electric vehicle demand among private buyers, where affordability remains the #1 barrier.
The arrival of new Chinese entrants is likely to continue to shake up the market and bring down prices for consumers.
Their share of new car advert views on our platform has more than tripled since March 2021. Underlying demand from consumers also remains strong after a record 89.1m visits to our website last month.
Ian Plummer, commercial director, Auto Trader
Private buyers need more encouragement to switch to EVs
Spring has definitely sprung for the car industry, with double-digit percentage growth for car registrations in March.
With new number plates released in March, this was always going to be a bumper month for new car sales, but this is now the 20th consecutive month of growth.
EV sales remain strong, although these numbers are being bolstered by fleet and business sales.
The government still needs to do more to encourage private buyers to make the leap to electric – greater charging infrastructure and tax incentives are what the industry needs to really power up the private EV market.
Alex Buttle, co-founder, Motorway
ZEV mandate will continue to cause headaches
The launch of the 2024 number plate in March contributed to another month of increased registrations, which will continue to provide optimism to dealers and manufacturers.
However, whilst consumer demand is returning, electric vehicle statistics remain skewed by fleet registrations.
The government’s ZEV mandate will cause headaches for manufacturers as buyers remain reluctant to make the shift to EV – with only 12% planning on buying an EV this year according to Close Brothers Motor Finance’s research.
The UK needs to work quickly to improve infrastructure such as charging points, which remain inadequate, in order to encourage widespread adoption.
Lisa Watson, director of sales, Close Brothers Motor Finance
