Auto Finance News

New car market defies national trend to deliver green growth

Share

The UK new car market grew 14.7% in January to reach 131,994 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), setting the tone for an anticipated countercyclical year of growth. This was the best start to the year since January 2020’s pre-Covid 149,279 units and marks the sixth successive month of expansion.

Electrified vehicles notably drove the increase, as manufacturers continue to bring ever more choice to the market despite ongoing strains on the supply chains. Hybrid electric vehicles (HEVs) comprised 14.4% of new car registrations, increasing volumes by 40.6%. Meanwhile, battery electric vehicle (BEV) registrations rose 19.8% to reach 17,294 units, or 13.1% of new registrations – slightly below the average recorded for 2022. Plug-in hybrid vehicles (PHEVs) recorded a 0.7% rise, although their share fell to 6.9% of new cars reaching the road. As a result, one in five new cars registered in the month came with a plug.

It was also a strong month for large fleet registrations, which increased by 36.8% to 69,540 units, while registrations by private buyers fell by -4.3% to 59,639 units – reflecting some easing of supply and evidence of how shortages last year distorted market performance. Registrations by businesses, the smallest segment at 2,815 units, rose by 45.6%.

Plug-ins are anticipated to comprise of more than one in four new registrations this year, representing growth of 32.1% or approximately 487,140 units, and almost a third (31.0%) of the market in 2024 at 607,150 units. However, the rollout of infrastructure needed to charge them is failing to keep pace. During Q4 2022, the ratio of new chargepoint installations to new plug-in car registrations dropped to one for every 62 – a significant fall compared with the same quarter last year, when the ratio was 1:42. As a result, in 2022, one standard public charger was installed for every 53 new plug-in cars registered, the weakest ratio since 2020. Mandating rollout targets for infrastructure and regulating service standards would give drivers certainty that they can always find a working, available charger. Infrastructure must be built ahead of demand else poor provision risks delaying the electric transition.

Mike Hawes, SMMT Chief Executive, said, “The automotive industry is already delivering growth that bucks the national trend and is poised, with the right framework, to accelerate the decarbonisation of the UK economy. The industry and market are in transition, but fragile due to a challenging economic outlook, rising living costs and consumer anxiety over new technology. We look to a Budget that will reaffirm the commitment to net zero and provide measures that drive green growth for the sector and the nation.”