New car market achieves two straight years of growth

New car sales in the UK have recorded 24 consecutive months of growth, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

July 2024 saw the new car market perform 2.5% better than the same month last year, with over 147,500 new cars registered and the strongest performance since July 2020 when dealerships first reopened following the first Covid-19 lockdown.

Fleet sales were the principal driving force behind the boost in the new car market in July, continuing the year’s trend, which saw a 13% increase in registrations and accounted for 62% of market share. Growth in fleet sales however more than offset the 11% decline in private deliveries, which is in part being driven by rising take-up of salary sacrifice schemes.

Petrol cars continued to make up the majority of new vehicles registered in July, at 52% market share, down slightly on the previous July’s figure, however, electric-enabled cars (including fully battery-powered EVs, hybrids and plug-in hybrids) made up more than four in 10 new cars hitting the roads – up from just over 35% in the previous year.

Despite the growth in electric vehicle sales, sales of battery electric vehicles remain below the 22% target set by government as part of the transition to net zero, with forecasts of market share being revised downwards.

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.“

While private car sales continued to rise, new registrations for vans and light commercial vehicles fell slightly in July, although the overall market remains at a three-year high. Sales were down 8.5% on last year, with electric van sales falling further by 14.6%.

With sales falling despite more electric vans on the market than ever (28 models) alongside financial incentives such as the Plug-in Van Grant for buyers, the SMMT attributes the drop in sales to concerns over the availability of charging facilities for commercial vehicles.

Mike Hawes, SMMT Chief Executive, commented:

“Britain’s new van market remains robust following a record-equalling growth run and, despite a dip in June and July, demand will resume with manufacturers offering impressive product line-ups. Declining uptake of the very greenest models remains a major concern, however, given the UK’s zero emission ambitions. Industry has invested – and continues to commit – billions into this transition but manufacturers cannot deliver this alone. Given the paucity of van-specific charging infrastructure, we need an equally ambitious mandate for chargepoint rollout, one that supports operators right across the country.“