9:34 am, May 4, 2023
The new car market grew for the ninth month in a row in April, but there’s a ‘cloud’ over future uptake of electric vehicles.
Data published today by the Society of Motor Manufacturers and Traders (SMMT) shows 132,990 cars were registered last month – an 11.6 per cent increase.
It was the best-performing April for two years, said the organisation, although registrations are still down by over 17 per cent on 2019’s volumes.
Large fleet registrations grew the most, up 33.1 per cent, while deliveries to private buyers dropped by 5.5 per cent.
Petrol cars remained the best-sellers accounting for more than 58 per cent of registrations, while battery-electric vehicles (BEVs) were second with a 15.4 per cent share.
One in three registrations were of electrified cars (pure electrics, hybrids and plug-in hybrids) in April.
The best-selling car in April was the Ford Puma with 3,570 registrations, followed by the Vauxhall Corsa (3,203) and Kia’s Sportage (3,073).
The Corsa remains the year-to-date best-seller with 14,034 registrations to its name, followed by the Nissan Qashqai (13,611) and the Puma (13,128).
The SMMT said 2023 has seen the best start to a year since the pandemic, with the overall market being up by 16.9 per cent in the first four months.
The organisation has revised its full-year prediction from 1.79m cars to 1.83m.
However, behind the optimism, the SMMT expressed concerns over growth in demand for BEVs.
It said high energy costs and ‘insufficient’ charging infrastructure will likely ‘soften’ demand.
As such, the SMMT has revised its expectations of BEVs taking 19.7 per cent of the market this year to 18.4 per cent.
For 2024, the SMMT expects 22.6 per cent of new car registrations will be BEVs, down from the 23.3 per cent forecast in January this year.
SMMT chief executive Mike Hawes said: ‘The new car market is increasingly bullish, as easing supply chain pressures provide a much-needed boost.
‘However, the broader economic conditions and chargepoint anxiety are beginning to cast a cloud over the market’s eagerness to adopt zero-emission mobility at the scale and pace needed.
‘To ensure all drivers can benefit from electric vehicles, we need everyone – government, local authorities, energy companies and charging providers – to accelerate their investment in the transition and bolster consumer confidence in making the switch.’
What the industry says
Cause for concern
Rising new car sales for a ninth month in a row represent a healthier economic picture than feared a few months back, which is good for the market, and consumer demand is strong with over 77m visits to the Auto Trader platform last month alone.
But the softening of the SMMT’s forecasts on EV sales offers some cause for concern and underlines our recent call for measures needed to support the EV market, such as cutting VAT on public chargers.
Hopefully ChargeUK’s new plans to invest £6bn in charging infrastructure will also help the cause of the transition to electric vehicles.
Ian Plummer, commercial director, Auto Trader
Used EVs becoming more affordable
Heading toward the halfway point of the year, UK car sales continue to hold up well during the cost-of-living crisis.
Whilst vehicle production is still ramping up, we are over the worst of the supply challenges and the long wait times of recent months are decreasing.
Car sellers are keen to protect the high margins of a supply constrained market, but we are seeing increasing discounting across the sector, bringing down average prices and creating better deals for consumers.
This has a knock-on effect in normalising historically high used car values.
Used EVs in particular are becoming more affordable as more cars than ever are entering the second-hand market, and new prices are also coming down. This creates more options for those wanting to make the switch to electric.
Chris Knight, UK automotive partner, KPMG
How will demand hold up?
EV sales go from strength to strength, even if their market share is levelling off.
Total sales in 2023 so far have surged well past those recorded by the same time last year, as the supply of new cars for sale finally catches up with demand.
Separate figures from the SMMT show the number of cars rolling off UK production lines rose by six per cent during the first quarter of the year compared with the first three months of 2022.
The big question now is how demand will hold up in the face of stubbornly high inflation and rising interest rates, which make the cost of financing a new car more expensive.
Another welcome benefit of the increased output of brand-new cars is an uplift in the number of nearly-new models moving on to the used market. The improved supply of low-mileage used cars is making some second-hand options particularly good value.
Mark Oakley, director, AA Cars
Charging infrastructure improvements needed
For the growth of EVs to continue at a pace that will meet mandated targets around the sale of zero-emission vehicles, improvements to the UK’s charging infrastructure are necessary.
The attractiveness of an EV to those with off-street parking compared with those without remains a major barrier to adoption.
Government figures show that around 40 per cent of Britain’s 33m cars are parked on the street, meaning that continued investment in affordable, accessible public charging points is needed to serve millions of potential EV drivers.
The targets recently set out by the government as part of the zero-emission vehicle (ZEV) mandate consultation will make it easier to plan for the number of public charging points required and is likely to result in substantial investment in charging infrastructure.
Jamie Hamilton, automotive partner and head of electric vehicles, Deloitte
Dealers need to stay cautious
So far, the consistent year-on-year increases in new car registration figures provides most welcome reassurance that the motor industry is gradually getting back to pre-pandemic levels.
However, while new car registration figures have so far provided reason to believe the market is on the up, it’s crucial that dealerships remain cautious.
Whilst the jumps in April’s numbers should be welcomed and viewed positively, it is also important to consider the impact of the new registration spike.
Despite a relative lack of choice under £50k for consumers, electric vehicle numbers continue to accelerate as manufacturers look to meet the government’s 2024 target, which requires 22 per cent of a manufacturer’s output to be electric.”
Lisa Watson, director of sales, Close Brothers Motor Finance
Sun is shining on new car industry
The sun is shining on the new car industry with further double-digit growth for car registrations in April.
Despite the rising cost of living and inflation remaining stubbornly high, motorists are still investing in both new as well as used cars.
Alongside this, the recent price drop in many popular EVs is further fuelling market growth, with more motorists than ever making the switch to go green.
Alex Buttle, co-founder, Motorway
