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New car sales grow for 21st month in a row but private demand continues to drop

  • New car registrations see 21st month of growth
  • Sales rose by 1.0% in April, says SMMT
  • Battery-electric vehicle market share rises to 16.9%
  • But it’s sustained entirely by business buyers

Time 9:31 am, May 7, 2024

New car sales rose in April for the 21st month in a row – albeit by just 1.0%  – to reach 134,274 units versus last year.

That’s according to the latest data published this morning by the SMMT, which said it was the market’s best April since 2021.

However, uptake was still 16.6% under the pre-pandemic level in what is traditionally a low-volume month following the March plate change – April 2019 saw 161,064 registrations.

And the growth was driven entirely by fleets, continuing the trend seen throughout this year, where registrations rose by 18.5% to reach 81,207 units – more than six in 10 of all new cars registered in April.

Private sales, meanwhile, fell by 17.7% to 50,458 units, while business registrations dropped by 16.1% to 2,609.

Electrified vehicles continued to be the main drivers of market expansion.

Plug-in hybrids (PHEVs) recorded the strongest growth, rising by 22.1% to comprise 7.8% of the market, followed by hybrid-electric vehicles (HEVs), which were up 16.7% with a 13.1% share of demand.

April was a brighter month for battery-electric vehicle (BEV) registrations, mainly thanks to what the SMMT called ‘compelling fiscal incentives for businesses’.

The top-selling new car in April was the Ford Puma with 4,339 units. Next favourite was the Volkswagen Polo (3,413), followed by the Audi A3 (3,010), Nissan Qashqai (2,495) and VW Golf (2,361).

The rest of the top 10 comprised the Kia Sportage (2,192), VW T-Roc (2,162), MG HS (2,073), Volvo XC40 (2,069) and VW Tiguan (2,004).

Overall, BEV uptake rose 10.7%, pushing up its market share to 16.9%, which the trade body said was a significant uplift on last April’s 15.4%.

But the SMMT said urgent action was needed to get private buyers enthusiastic again about making the switch.

Fewer than one in six new BEVs bought in April went to consumers, whose uptake volumes fell by more than a fifth to a 15.6% share.

The SMMT said that the lack of government incentives for private motorists was still a barrier that couldn’t be overcome by industry alone.

It wants to see similar tax incentives for private buyers that the fleet market is given, which it says will ‘accelerate an overall market shift, fuel economic growth and deliver a sustainable, fair transition’.

The SMMT reckons that temporarily halving VAT on new BEV purchases would help more than 250,000 drivers switch from fossil fuel to electric over the next three years.

In addition, altering the threshold for the ‘expensive car’ supplement to vehicle excise duty – due to apply to EVs from April 2025 – would send the message to the market that zero-emission vehicles are necessities, not luxuries.

It is also urging action over infrastructure, saying there is currently just one standard charger available for every 35 plug-in cars on the road – a negligible improvement on 2022 when the ratio was one for every 36.

‘With current levels of infrastructure insufficient to inspire more consumers to go electric, there is a clear need for measures to accelerate chargepoint rollout,’ it said, adding that a total of 393,000 BEV registrations are anticipated this year.

It added that a total of 1.984m new cars are now anticipated to be registered this year, which is a 4.2% rise on last year and 0.5% up on January’s outlook.

But it’s revised its 2024 BEV volumes forecast downwards by 5.2% to 93,000 BEV registrations and an anticipated market share now of 19.8%, which it said was ‘significantly below the government target of 22% per manufacturer’ following the introduction of the ZEV mandate

SMMT chief executive Mike Hawes said: ‘The new car market continues to grow even in the quieter months, driven primarily by fleet demand.

‘This is particularly true of the electric vehicle sector, where the absence of government incentives for private buyers is having a marked effect.’

He added: ‘Although attractive deals on EVs are in place, manufacturers cannot fund the mass market transition single-handedly.

‘Temporarily cutting VAT, treating EVs as fiscally mainstream not luxury vehicles, and taking steps to instil consumer confidence in the chargepoint network will drive the market growth on which Britain’s net zero ambition depends.’

What the industry says

Consumers face being priced out

With new car prices up 29% on average since 2020, there’s a risk that many consumers will be priced out of the market, which we can see playing out in April’s flat retail registrations.

Even though average EV prices are only up 7% in that period, they are typically 35% dearer than traditionally fuelled petrol and diesel models.

The discounts we’ve seen manufacturers offer to incentivise consumers into new electric cars seem to be working, with BEV registrations up on 2023. That said, we’ll need to see even more price action to achieve mass electric adoption.

Ian Plummer, commercial director, Auto Trader

Cause for concern for manufacturers

Despite significant headwinds including the fluctuating price of fuel and rising insurance premiums, the new registration figures for April reflect a robust consumer demand for vehicles as we gear up for summer.

Manufacturers may have cause for concern that the number of new petrol vehicles registered continues to outdo the sales of battery-electric vehicle registrations, bringing into sharp focus the work the UK government needs to do to improve inadequate infrastructure such as charging points, and allay motorist concerns to encourage adoption.

It’s vital that dealers keep abreast of consumer demand by using the tools and insights at their disposal to stock forecourts appropriately.

Lisa Watson, director of sales, Close Brothers Motor Finance

Pressure on household budgets is easing

With falling inflation slowly easing the pressure on household budgets, consumer confidence is stabilising – and this is leading many people who held off changing cars last year to do so now.

While demand from drivers is holding up well, separate manufacturing data from the SMMT shows that the number of new vehicles rolling off UK production lines in March was 27% lower than the same month last year.

This decline has been linked to manufacturers retooling their factories as they prepare to produce next-generation models, including EVs. But manufacturers remain committed to maintaining a steady output.

James Hosking, director, AA Cars

This is a clarion call

For many, confirmation of April’s year-to-date BEV share will come as something of a disappointment.

The numbers should serve as a clarion call to this, or any new, government — the challenges faced by the automotive sector deserve greater focus, not just legislation.

If manufacturers are to remain committed to the UK long term, the government must stimulate demand. OEMs are clearly invested in the shift to electrification, but the ZEV mandate doesn’t address the more pressing issue of public confidence in EVs.

Philip Nothard, insight director, Cox Automotive

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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