The UK new car market clocked up its 20th consecutive
month of growth in March, with a 10.4% rise in registrations,
according to the Society of Motor Manufacturers and Traders. In
what is typically the busiest month of the year due to the new
numberplate, 317,786 new cars reached the road with a 24 plate –
the best March performance since 2019, although still -30.6%
below pre-pandemic levels.1
Growth was again driven by fleet investment, up 29.6% as the
sector continues to recover following the constrained
supply of previous years. Registrations by private buyers fell by
-7.7%, with a challenging economic backdrop of low
growth, weak consumer confidence and high interest rates.
The small business registration segment,
meanwhile, declined -8.0%.
Petrol cars retained the lion's share of the market, at 55.7%,
with registrations up 9.2% year on year, as diesel volumes fell
-2.7% to account for just 7.3% of demand. Uptake of
hybrid electric vehicles (HEVs) reached record levels, 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, up by more
than a third to 24,517 units, or 7.7% of all new registrations.
Conversely, while battery electric vehicle
(BEV) registration volumes were at their highest
ever recorded levels, market share fell by one percentage
point from the same month last year, down to 15.2%. Registrations
rose 3.8%, with only fleets showing any volume growth.
The fall in BEV market share within a growing market
underscores the need for government to support consumers to speed
up fleet renewal. Large fleets continue to drive BEV uptake,
thanks to compelling tax incentives but while registration
volumes increased in March, market share declined. A tough
economic backdrop makes it ever more challenging for consumers to
invest in these new technologies.
Manufacturers themselves are offering generous incentives,
helping more drivers switch to zero emission
vehicles and deliver government and industry
carbon targets, but this cannot be
sustained indefinitely.2 A full market
transition needs incentives not just for fleet and business
buyers but private retail buyers as well, something that 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, helping more of them move to
zero emission vehicles sooner.
Mike Hawes, SMMT Chief Executive, 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.”
