The UK new car market rose by 2.5% in July, delivering two years
of consecutive growth, according to the latest figures from the
Society of Motor Manufacturers and Traders
(SMMT). With 147,517 new cars reaching the
road, it was the best performance for July since 2020, when a
re-opening of dealerships following four months of lockdown saw a
surge in deliveries to fulfil demand pent-up demand.1
As has been the pattern for the year, July's growth was sustained
entirely by the fleet sector, which recorded a 13.0% increase in
registrations to achieve a 62.0% market share. Private demand
continued to diminish, falling by -11.1% to account for 36.2% of
deliveries in the month, although the
growing popularity of salary sacrifice purchasing will
contribute to this decline.
Electrified vehicle demand outpaced the overall market,
accounting for four in 10 (42.0%) new cars registered in the
month. Hybrid electric vehicle (HEV) uptake increased by 31.4% to
achieve a 14.5% market share, while plug-in hybrids (PHEV) grew
12.4% to take 8.9% of registrations. Battery electric vehicle
(BEV) volumes, meanwhile, were up 18.8%, resulting in an overall
market share of 18.5%. While the private share of the BEV market
continues to fall – 17.2% went private buyers, compared with
20.3% last year – private BEV volumes did increase by a marginal
0.9%. Overall, BEVs account for 16.8% of the new car
market, year to date.
With zero emission vehicles mandated to comprise a minimum 22% of
each brand's new car registrations over the full year, the pace
of transition needs to increase significantly. The latest
industry outlook2, however, suggests that such a surge
is looking increasingly unlikely given the current market
conditions. While the outlook anticipates overall market growth
in 2024, expectations have been revised downwards
since April,3 with 1.968 million new car
registrations now forecast by the end of the year. The
anticipated BEV share of the market has also been revised
downwards to 18.5% from the 19.8% expected in April. Last week's
interest rate cut was already ‘priced in' to the latest outlook
but further cuts would be welcome, helping reduce the costs of
finance and making new car purchases more accessible to more
consumers.
Mike Hawes, SMMT Chief Executive, said,
“Two years of new car market growth against a backdrop of a
turbulent economy is testament to the sector's resilience and the
attractiveness of the deals on offer. Weakening private retail
demand, however, particularly for EVs and despite generous
manufacturer discounts, is the over-riding concern. More people
than ever are buying and driving EVs but we still need the pace
of change to quicken, else the UK's climate change ambitions are
threatened and manufacturers' ability to hit regulated EV targets
are at risk. Achieving market transition at the pace demanded
requires greater support for consumers and, with the
all-important new numberplate month of September beckoning,
action on incentives and infrastructure is needed now.”
