New car market maintains momentum with tenth month of growth

In an encouraging trend for the UK automotive industry, we are witnessing the longest stretch of uninterrupted growth in eight years. The new car market saw a robust 16.7% surge in May with 145,204 units registered, as per the latest data from the Society of Motor Manufacturers and Traders (SMMT). This highlights a promising upward trajectory, marking 10 months of sustained growth. However, it’s important to note that current registration levels are still 21.0% lower than the pre-pandemic figures from 2019.

The significant growth can largely be attributed to large fleet registrations, which rose by an impressive 36.9% to 76,207 units. This increase reflects a supply stabilisation after grappling with substantial challenges in 2022. Meanwhile, individual buyers demonstrated a marginal dip of 0.5% with 65,932 vehicles registered. On the other hand, smaller business fleets recorded a remarkable 22.5% year-on-year increase with 3,065 units registered.

Traditional petrol-powered cars continue to lead the market, making up 57.1% of total registrations. However, alternatively powered vehicles are steadily carving a larger slice of the market pie. Plug-in hybrids (PHEVs) increased by 23.0% to claim a 6.2% market share, while hybrids (HEVs) rose 22.2% to account for 12.3% of all registrations. May was a significant month for battery electric vehicles, as they solidified their position as the UK’s second most popular power train. There were 24,513 new additions on the road, a staggering 58.7% increase from last May, capturing a 16.9% market share.

Lower medium, supermini, and dual-purpose cars were the most popular categories in May, representing 86.3% of the market. A significant milestone is that every segment now offers a zero-emission option, with over 80 models – about a quarter of all new car models – available. Moreover, these new battery electric vehicles boast an average range of 236 miles, comfortably exceeding the UK drivers’ average weekly mileage of approximately 100 miles.

While the industry’s multi-billion pound investments are fuelling growth and diversity in choice, the pace of the shift towards zero emissions must quicken. With the Zero Emission Vehicle Mandate coming into effect from January, a minimum quota for new battery electric vehicle registrations will be imposed for every brand. The challenge will be to ensure market demand matches the available models and volumes. To instil confidence among prospective buyers, we need collective action from all stakeholders. This includes a supportive fiscal framework, streamlined planning processes, swift grid connections, and the establishment of a nationwide network of reliable, affordable, and sustainable charge points. The investments are in the pipeline, but setting regulated targets for public charger deployment in line with new vehicle registrations will instil greater confidence among drivers and facilitate the UK’s transition to zero emissions

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